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The German State 

on a National and 

Socialist Foundation 

Gottfried Feder 

Translated by Alexander Jacob 


First published in 1923, be- 
fore Hitler's rise to power, this 
first ideological formulation 
of the National Socialist state 
by Gottfried Feder highlights 
the early economic focus of 
the NSDAP in creating a state 
freed from the fundamental 
Jewish economic distortions 
of Aryan society through the 
credit system of the banks, 
with its exploitative interest on large loan capital, and the 
stock-exchange system, with its alienation of capital from 

The National Socialist solution to the debilitation of Ary- 
an nations is seen to consist in a strengthening of the state 
on the basis of social justice whereby the state assumes 
control of its economy through nationalisation of its central 
bank and supervised distribution of its industrial goods. 

Such a state naturally also demanded the exclusion of 
exploitative and anti-national communities like the Jews 
from the public life of the German nation. 


Gottfried Feder 

The German State 

on a national and socialist foundation 

New approaches to the state, finance and economy 

translated with a Preface by 
Alexander Jacob 

A World View Foundations Project 

Historical Review Press 


Preface - Alexander Jacob i 
The German State on a national and socialist foundation 

Foreword - Adolf Hitler 1 

Preface 2 

Introduction 4 

L The Foundations 

The moral foundations ' 

The economic foundations 14 

On the boundaries of the state and the economy 20 

The national political foundations 27 

Insights and goal-setting 35 

II. The Programme 

The origin of the programme 41 

The national and economic programme of the National Socialist 

German Workers' Party 43 

III. The State Structure of the National Socialist State 

The National Socialist idea of the German state 49 ' 

The nationalist idea 52 

The citizenship right 60 

The national economy 65 
National financial reform - Money and credit in the National Socialist state 77 

The national financial economy 85 

The Versailles dictate 89 

The loan economy 95 

The Reichsbank corporation 108 

Inflation 1 1 1 

National financial reform 1 1 6 

New ways 1 27 

The social construction- and economic bank 1 3 8 

The state without taxes 148 

The financial political liberation of the state 1 56 

The German State 

Alexander Jacob 

Gottfried Feder was born in 1883 in Wurzburg and studied 
engineering at the Technical Universities in Munich, Berlin and 
Zurich. After the completion of his studies he set up a construction 
company of his own in 1908 under the aegis of Ackermann and Co. 
and undertook several projects in Bulgaria. From 1917 onwards he 
taught himself financial politics and economics and, in late 1918, 
not long after the proclamation of the Weimar Republic by Philipp 
Scheidemann in November of that year, Feder wrote a manifesto on 
usury 1 and sent it to the Kurt Eisner government, though he obtained 
no response. The Treaty of Versailles signed in June 1919 which 
determined Germany as solely responsible for the war and liable to 
reparations caused Feder to fear that Germany was now firmly in the 
hands of the international financiers. In September of that year, Feder 
established a militant league (Kampfbund) for the breaking of interest 
slavery and the nationalisation of the state bank. His anti-capitalism 
was bound also to racialism insofar as the international financiers were 
considered to be mostly Jews. 

Feder's nationalist efforts drew him into a close alliance with the 
anti-Communist activist Anton Drexler (1884-1942) and Dietrich 
Eckart (1868-1923), the editor of the anti-Semitic journal Auf 
gut deutsch and later, of the National Socialist organ, Volkischer 
Beobachter. The three together formed, in January 1919, the Deutsche 
ArbeiterPartei(DAP) 2 . AdolfHitlerjoinedtheDAP in late September 
1919 and soon emerged as the leader of the party, which he renamed 
the Nationalsozialistische Deutsche Arbeiterpartei (NSDAP). Hitler 

1. Manifest zur Brechung des Zinsknechtschaft des Geldes, Diessen vor Munchen: 
Joseph C. Huber, 1919; cf. The Manifesto for the Breaking of the Financial Slavery to 
Interest, tr. Alexander Jacob, Carshalton, Surrey :Historical Review Press, 2012. 
2 .Another major early member was Karl Harrer (1 890-1926), who joined the party in 
March of 1919. Harrer, like Drexler, was a member of the occultist Thule society in 
Munich, which was an off-shoot of the Germanen Order founded in 1912 by Theodor 
Fritsch. Eckart too was influenced by the doctrines of the Thule society. 


Alexander Jacob 

had, even before his joining the party, attended Feder's lectures on 
economic subjects and wrote later in his Mein Kampf (1925/6) of this 

For the first time in my life I heard a discussion which dealt with the 
principles of stock-exchange capital and capital which was used for 
loan activities ...The absolute separation of stock-exchange capital 
from the economic life of the nation would make it possible to oppose 
the process of internationalization in German business without at the 
same time attacking capital as such, for to do this would jeopardize 
the foundations of our national independence. I clearly saw what 
was developing in Germany and I realized then that the stiffest fight 
we would have to wage would not be against the enemy nations but 
against international capital 3 . 

In the Foreword to the original 1 923 edition of the current work, 
Der deutsche Staat, Hitler wrote that in this work the National Socialist 
movement had indeed acquired its "catechism" 4 . 

In 1920, Hitler, along with Feder and Drexler, composed the '25 
point Programme' of the NSDAP. This programme rejected the Treaty 
of Versailles and called for a reunification of German peoples along with 
an exclusion of aliens, especially Jews, from national life. In February 
1920, Hitler held a rally in which he presented the programme to the 
German people. Later, in 1927, Feder published a comprehensive 
version of the programme entitled Das Programm der NSDAP and 
seine weltcmsckaulichen Grundlagen. In 1 923, Feder offered a further 
elaboration of his national economic views in the present work, Der 
deutsche Staat aufnationaler undsozialer Grundlage 5 , which was re- 
issued in 1932 in the "Nationalsozialistisdic Bibliothek" series 6 . 

Feder took part in Hitler's failed Beer Hall Putsch against the 
Bavarian government in 1923 but was only lined 50 marks for 
unlawful assumption of authority since he had acted, for a day, as the 
new "finance minister". In 1924, he was elected a representative to 

3. Adolf Hitler, Mein Kampf, tr. James Murphy, London: Hunt and Blacketl 1939, pp 168,171. 

4. See below p. 1 . 

5. This work was translated by E.T.S. Dugdale as The Pntgnmmn- <>t //;<• A S/ > tl'miJih «<•»<•»•<// 
conceptions, Munich, 1932. 

6. I have for my translation used the 1932 edition, vol.35 of the "NationallOzialistische 
Bibliothek" series. 


The German State 

the parliament. In parliament, he demanded the confiscation of Jewish 
property and the freezing of interest-rates, which were key elements 
of the anti-capitalist programme of the party. In 1926 Hitler entrusted 
Feder with the editorial direction of a series of books on National 
Socialist ideology under the title "Nationalsozialistische Bibliothek" 
(National Socialist Library). In 1931, Feder was appointed chairman 
of the economic council of the NSDAP. But gradually, under pressure 
from big industrialists like Gustav Krupp, Fritz Thyssen and Emil 
Kirdorf, Hitler decided to distance himself from Feder's socialist 
ideas. 7 With Hitler's strategic alliance with big industrialists and 
capital, even foreign capital, for his intended war on Bolshevism, 
Feder lost most of his influence on the party since foreign banks 
especially would not have supported Feder's plans for a nationalised 
interest-free banking system. The loss of interest in Feder's economic 
policies among the party members is evidenced in Hans Reupke's 
book Der Nationals ozialismus und die Wirtschaft (1931), where the 
author stated that it was no longer necessary to deal with the "breaking 
of interest slavery" in "the extreme form in which it first emerged" 8 . 

Thus, when Hitler assumed power in 1933, Feder was not named 
Economics Minister but rather only State Secretary in the Economics 
Ministry. However, Feder published in 1933 a collection of his essays 
entitled Kampf gegen die Hochfinanz as well as a book on the Jews 
called Die Juden. In 1934, the influential banker Hjalmar Schact was 
made Economics Minister since his contacts with the big industrialists 
made him more useful to Hitler in his rearmament aims than Feder 
with his stark anti-capitalist doctrines. Feder's subordination to 
Hjalmar Schacht was indeed a concrete sign of his fall from grace. 
After the Knight of the Long Knives in 1934, when left-wing 
nationalists like Gregor Strasser were assassinated, Feder withdrew 
from the government. In 1936, he was given a new job as professor at 
the Technical University in Berlin which he maintained until his death 
in 1941. 

7. For the part played by big industries in Hitler's rise to power see G. Hallgarten, "Adolf Hitler 
and German heavy industry 1931-1933", Journal of Economic History, 12 (1952). 

8. H. Reupke, Der Nationalsozialismus und die Wirtschaft, Berlin, 1931, pp.29ff. 


Alexander Jacob 


Feder's Deutsche Staat is indeed one of the most important treatises 
on National Socialist economics. 9 However, it has a precedent in 
the Austro-Hungarian Bohemian German, Rudolf Jung's work, Der 
Nationale Sozialismus (1919). Rudolf Jung (1882-1945) was a civil 
engineer from Jihlava (in the current Czech Republic and former 
Austro-Hungarian Empire) who joined the Bohemian Deutsche 
Arbeiter Partei (DAP) in 1 909. The DAP was founded in 1 903 in Aussig 
(now Usti nad Labem in the Czech Republic) by Germans threatened 
by the increasing Jewish and Czech influence in the empire. It was 
renamed Deutsche Nationalsozialistische Arbeiter Partei (DNSAP) in 
1918. Jung's work Der Nationale Sozialismus: seine Grundlagen, sein 
Werdegang und seine Ziele (1919) was intended as a German nationalist 
answer to Marx's Das Kapital. 10 The work is divided into two parts, 
the first dealing with 'The Foundations of National Socialism' and 
the second with 'The Development and Goals of National Socialism'. 
Jung's nationalism focusses on social and economic questions and, 
exactly like Feder, Jung stresses the difference between income 
derived from real work and that arising from interest." His strong 
socialist and anti- Jewish viewpoint is evident throughout this work: 

All non-socialist parties are based in the main on "individualism", i.e. 
the demand for the greatest possible freedom and lack of constraint of 
the individual. Economically it is expressed in Manchester liberalism 
and, further, in Mammonism. The ruthless ruler who is tormented by 
no pang of conscience is the goal, the weaker man falls thereby under 

9.The closest to National Socialist economics is the Social Credit movement founded in Britain 
by C.H. Douglas (1879-1952), whose work Economic Democracy was published in 1920 (see 
F. Hutchison and B. Burkitt, The Political Economy of Social Credit and Guild Socialism, 
London: Routledge, 1997). Douglas influenced Oswald Mosley's British Union of Fascists in 
the thirties (see Kerry Bolton, "Breaking the bondage of interest, part 2", Counter-Currents, 
August 11, 201 1, 1/08/breaking-the-bonilagc-of-interesta- 
right-answer-to-usury-part-2/ was on his suggestion that Hitler changed the name of the German branch of the DAP in 
1920 to Nationalsozialistische Deutsche Arbeiterpartei (NSDAP). 

11. Feder's manifesto on interest-slavery was interestingly published in the same year as Jung"s 
work on National Socialism. 


The German State 

the wheels. Now, since the Jew is the most ruthless, he can fare best 
thereby. Thus all non-socialist anti-Jewish orientations unwillingly 
support the rise of Jewry to world-rulership. 12 

Further, democracy itself is the vehicle of Jewish international 

If we were to sum up, we might say that the entire international democracy 
whose alleged ideals the major press and parties represent and on whose flag 
they swear, is nothing but the political crystallisation of the Jewish spirit and, 
in the final analysis, serves no other goal but the establishment of the world- 
rule of Jewry. 13 

Another writer who contributed to the exact identification of 
the Jewish constitution of international high finance was Heinrich 
Pudor (1865-1943), who also wrote under the pseudonym Heinrich 
Scham (the German translation of the Latin "pudor"). Pudor was a 
vegetarian and naturist who, from 1912, published several anti-Semitic 
pamphlets and books including an extensive series on the international 
connections between the various Jewish high financiers. 14 Feder 
refers sympathetically to Pudor in the present work. However, Pudor's 
magazine Swastika^ 5 was banned in 1933 by the National Socialists 
for its criticisms of the National Socialist leadership and the regime's 

1 2. Rudolf Jung, Der Nationale Sozialismus, Munich, 1 922, p. 1 87f. 

l4.The pamphlets that he self-published (in Leipzig) in this series, "Die internationalen 
verwandtschaftlichen Beziehungen der jiidischen Hochfinanz'" (The international kindred 
relationships of Jewish high finance'), between 1933 and 1940 present short historical accounts 
of the different branches of Jewry in various countries of Europe as well as in America. For 
instance, the first pamphlet is on Das Haus Rothschild, numbers two to four on Ginsberg und 
Giinsbeig und Asher Ginzberg, five to eight on Jakob Schiff und die Warburgs und das New 
Yorker Bankhaus Kuhn, Loeb & Co., nine to ten on Amsterdamer und Oppenheimer Juden, 
eleven on Franzosische Finanzjuden, twelve on Tschechoslowakische Finanzjuden, fourteen 
on Rumdnische Finanzjuden, fifteen on Lessing und Moses Mendelssohn und das Bankhaus 
Mendelssohn & Co. , seventeen on Polnische Finanzjuden, eighteen on Schwedische Finanzjuden, 
nineteen on Hollandische und belgische Finanzjuden, twenty on Frankfurter Finanzjuden und 
die I.G. Farben, twenty-one to twenty-three on Englische Finanzjuden, thirty-four to thirty- 
eight and forty-three to forty -four on Tshechische Finanzjuden and thirty-nine to forty-two on 
Ungarische Finanzjuden. In addition, he published, in Halle, a similar work on Amerikanische 
Finanzjuden (1936). 
15.Seebelowp. 118 


Aexander Jacob 

surprising toleration of Jews. Further, five issues of the series on 
Jewish high finance were banned including no. 13, Neues iiber Br. 

Roosevelt und seine jiidischen und Kommunistischen Verbindungen, 
and no.49, Judendammerung. "Juden unerwiinscht". Keine jiidischen 
Rechtsanwdlte mehr. Ende der Judenfinanz in Deutschland, on account 
of what a state official, Raymund Schmidt, described as Pudor's "no 
longer opportune polemical methods which were indeed exploited by 
the English recently for the purpose of counter- propaganda. 16 


Feder's treatise on national economy, like Rudolf Jung's, is 
remarkable for its strong moral foundation and its formulation of 
National Socialism as a movement for social justice as well as for 
national regeneration. Unlike capitalism with its "soul-destroying 
materialistic spirit of egoism and avarice with all its concomitant 
corrupting manifestations in all fields of our public, economic 
and cultural life" (p.47) 17 and unlike Marxism, which insists that 
everything should belong to the One, which might be either the State 
or Mammon controlling it, National Socialism wishes to revert to the 
mediaeval and Prussian dictum of "suum cuique", 'to each his own', 
whereby each person will earn as much as he deserves according to his 
performance of work, with the fullest possible responsibility, as a duty. 
Economically, this moral doctrine is translated into the doctrine of 
serving "the public interest" before self-interest. Not profitability but 
fulfilment of demand is the National Socialistic basis of the economy. 

Unlike Marxism, National Socialism will not prohibit private 
property but respect it as the privilege of the creative and productive 
Aryan man. On the other hand, the mobile Jewish mind has no deep 
connection with the land but rather exploits the productions and 
property of the natives financially through all sorts of legal claims, 

16. "nicht mehr zeitgemaBen Kampfmethoden, die sogar von den Englandern in jiingster Zeit 
zum Zwecke der Gegenpropaganda ausgeschlachtet wurden" (see Gerd Simon. "Chronologie, 
Pudor, Heinrich", p.l9f.) 

1 7. AI1 page-references are to the present edition. 


The German State 

bonds and mortgages, whereby "property" is turned into a profitable 
"possession" (p. 18). In order to counter these avaricious strategies 
of the Jews, the National Socialist state will enforce limitations on 
the right to property, personal or commercial, so that in all cases the 
welfare of the whole, the nation, rather than of individuals will be first 
served. In Feder's discussion of the party's programme in Part II, we 
note that, since the social policy is "the welfare of the whole", the 
financial policy of the National Socialist state is accordingly directed 
against those financial powers who tend to develop "a state within the 
state" (p.44). As he puts it: 

In the last and deepest analysis, it is a matter of the battle of two 
world-views that are expressed through two fundamentally different 
intellectual structures - the productive and creative spirit and the 
mobile avaricious spirit. The creative spirit rooted in the soil and 
yet again overcoming the world in metaphysical experience finds 
its principal representati ves in Aryan man — the avaricious, rootless 
commercial and materialistic spirit directed purely to the this-worldly 
finds its principal representative in the Jew (p.47). 

The strength of Germany before the war was due to its unity 
under Bismarck and its efficient industrial sector. This advantage was 
undermined by the dependence of the economy on the credit system of 
the banks and "the inventors and bearers of the modern credit system" 
are the Jews (p. 54). The mediaeval system of credit was based on the 
belief ("credo") of the creditor that his money could be used to greater 
economic advantage by the debtor whereby the debtor, if successful 
in his enterprise, may return a share of his profits in gratitude to the 
creditor. Standardised interest, on the other hand, was forbidden by the 
Church as usury (p.71). Feder advocates a return to the conception of 
money as a token of "performed work" or of a product so that money 
cannot, independently of any work, be hoarded for the purpose of 
being lent out later at interest. 

Feder further points out that it is the stock-market that lies at the 
basis of the alienation of capital from work: 

Anonymisation - the depersonalisation of our economy through 


Alexander Jacob 

the stock-marketable form of the public limited company - has to a 
certain degree separated capital from work, the share-holder knows 
in the rarest instances something of his factory, he has only the one- 
sided interest in the profitability of his money when he has invested it 
in the form of shares (p.55) 

Apart from the indifference of the shareholder to the quality of the 
goods produced by the company in which he invests, the market in 
general has diverted production from its legitimate task of fulfilling 
real needs to that of stirring up - through the Jewish market-crier's 
technique of advertising - artificial needs among the public that will 
bring in greater profits. This fundamental transformation of national 
economics has been supported in academic circles by Jewish scholars 
who restrict their economic analyses to descriptions of the current 
economic system rather than investigating its social and political 
legitimacy. This sort of intellectual subversion is further continued 
by the Jewish intelligentsia in the fields of art, entertainment and the 

The major source of the current distress of Germany is indeed the 
interest owed to large loan capital. The burden of interest has indebted 
entire nations to international high finance and forced them to become 
interest-collectors for the latter which they do by taxing the working 
people ever harder. Feder rightly calls this false economic process 
an "international fraud" (p. 86). The power of international finance 
has however grown so great that it was able to encircle Germany 
as soon as it perceived that its currency was rising in strength and 
independence. Once they succeeded in militarily defeating Germany, 
the international financial powers then enforced further enormous 
debt burdens on it through the Treaty of Versailles. Feder therefore 
proposes the cancellation of the payment of the interest on these debts 
to the Allies (p.97). Indeed, the remedy to the interest burdens of all 
nations to international finance is the legal abolition of interest (p. 94). 
And this is simultaneously the solution to the Jewish question itself: 

The solution of the interest problem is the solution of the Jewish 
question. The solution of the interest problem in the sense of our 
explanations is the breaking of the Jewish world-rule, because it 


The German State 

smashes the power of world Jewry - its financial power. 

The fullest representation of the socio-economic interests of a 
nation should be the state, and its industries should be models of 
efficiency and commercial success. One example of such an industry 
in Germany is indeed the transport industry and especially the German 
railways. Unlike Bolshevism, which seeks to control all production, 
the National Socialist state will, through the establishment of storage 
and distribution cooperatives under state supervision (p. 17), remove 
only the avaricious interference of private commerce between 
production and consumption. As the means of exchange necessary for 
the exchange of goods, money will be under the control of the state 
through a nationalised state bank. 

Instead of borrowing money from private banks, the state should, 
in the case of all large public works projects, finance the latter though 
the issuance of interest-free notes of its own. The Reichsbank's 
sovereignty of issuing notes must be regained through nationalisation 
(p. 72). Freed of interest-burdens to banks, the state will ultimately be 
able to operate in a mostly tax-free manner (Ch.22, 'The state without 
taxes'). Taxes will be restricted to the coverage of non-productive 
tasks such as the administration of justice, the police system, medical 
and educational systems, if the commercial enterprises of the state 
such as the railways post and telegraph, mining and forestry do not 
present surpluses wherewith to pay for these tasks (p.92). International 
transactions should be conducted through a clearing system rather 
like that of the international postal union "without the international 
finance benefiting two or three times in all these simple mercantile 
operations and becoming big and fat at the cost of the productive 
nations" (p. 77). 

But the state must be powerful if it is to effect any reforms. 
Unfortunately, the Weimar Republic has abjectly accepted the 
monstrous burden of guilt after the war with the result that "the 
members of the Chosen People can, on these reparations, forever lead 
a glamorous work-free life in all the countries of the world at the cost 
of German work." (p. 19). The crisis faced by Germany after the war 
was facilitated by parliamentarianism and Mammonism. The "great 


Alexander Jacob 

democratic lie of the capacity of the people for self-government" is 
to be combated along with the real capitalistic rulers of democracies. 
Marxism likewise is a sham socialist system that employs the 
dissatisfaction of those exploited by Mammonism for the benefit of the 
"handlers for international capital" in order to "divert from themselves 
the hatred of the exploited" (p. 25). 

The majority of the principal Marxists as well as Mammonists are 
Jews, and so "The Jewish question is becoming a world-question on 
whose solution the welfare and woe of the nations will be dependent" 
(p. 26). The solution of this question cannot be through violence since 
"indeed one cannot kill the plague bacillus individually, one can 
only eradicate it by cutting off its life necessities from it" (p.26). A 
suggestion of what might be done to reduce their ill-earned gains is 
contained in point 1 7 of the party's programme which envisages 

creation of legal possibilities of confiscating if necessary land that 
was acquired in an illegal way or not administered according to the 
viewpoint of the welfare of the people. This is directed thus mainly 
against the Jewish land speculation companies (p.47) 

Further, a removal of Jews from all public positions will 
cause no difficulty to the nation since "the real vitally important 
productive activity in industry and agriculture, in the professions and 
administration, is almost entirely free of Jews" (p. 38). Concomitant 
with the removal of Jews from the "national body" is the enforcement 
of new citizenship laws whereby the citizenship rights will be 
"acquired" by the citizens and not merely granted to them. Thus only 
those who pledge themselves to the German community and culture 
and do not continue an adherence to another nation can obtain these 
rights (p.39). 

The National Socialist state will be a strong state that includes 
all the German tribes and its power will be concentrated in a strong 
leader, or autocrat, who embodies "the highest responsibility" (p.22) 18 
since the German people have traditionally wanted a strong leader, and 
monarchs are not always to be relied upon. The leader of the National 

1 8. The "Fiihrer principle" was championed also by Rudolf Jung in his Nationale Sozialismus, 


The German State 

Socialist state, on the other hand, is not envisaged as a permanent ruler 
but one chosen only for the re-establishment of order and prosperity of 
a debilitated nation. After he has accomplished his goals he may step 
aside to let other rulers take his place under the constitution. Indeed, 
the National Socialist state may be characterised as a constitutional 
autocracy (p.31). The constitutional aspect of the state will be used 
especially to ensure an effective labour law and social insurance 
(p.23). Obviously, in a German national state, no members of foreign 
races can assume the leadership of state affairs (p.22). 

Feder is aware of the adverse reaction of the international financiers 
to such autarkic measures but he believes that a transformation of 
interest-bearing bonds into interest-free bank assets or postal cheque 
accounts (p. 96) wherewith foreign creditors can be paid will avert the 
wrath of the latter. He also suggests that boycotts can be overcome 
through transactions with neutral countries. As for military action, 
he believes that it is not likely to be pursued by the foreign creditor 
nations since 

if the German people saw the French or Jewish tax collector 
sitting in every tax- and pension office, and if the best cows were 
taken from the stalls of the farmers by these foreign oppressors 
- then the anger and indignation would perhaps become soon so 
strong that one night would sweep the foreign spectre away with 
a bloody broom and free Germany, (p.97) 


We see that, in spite of the lucidity of his economic doctrines, Feder 
rather underestimated the unforgiving nature of the Mammon that he 
was striving against. In keeping with Feder's doctrines, the Nationalist 
Socialist state officially cancelled the war debt to the Allied nations 
and sought, from 1933 on, to combat the cumulative deflation by 
the creation of money and work. 19 Work was created by increasing 

19. See G. Senft, "Anti-Kapitalismus von Rechts? - Eine Abrechnung mit Gottfried Feders 
■Brechung der Zinsknechtschaft"', Zeitschrift fur Sozialokonomie, 106 (1995), pp. 18-32. 


Alexander Jacob 

public works activity, such as notably the building of super- highways, 
and other construction and agricultural projects. These projects were 
financed, as Feder had recommended, by the issuance of government 
bills. The production of armaments especially was spurred by the use 
of the so-called 'Mefo' bills 20 - named after Schacht's Metallurgische 
Forschungsgesellschaft (Mefo), which served as a government 
holding company. 21 These bills were used by government contractors 
for payment of their needs and were valid as a form of currency. As 
a result of these economic strategies, as Overy notes, "the banks 
increasingly became mere intermediaries, holding government stock 
and helping in the job of keeping bills circulating in the way that the 
government wanted." 22 Tax levels were simultaneously reduced for 
farmers, small businesses and heavy industry through the "remission 
of taxes already paid". 2 - 5 However, Hitler was also dependent in his 
ambitious rearmament plans on foreign finance, which certainly would 
not have accepted Feder's insistence on an abolition of interest. 24 

The National Socialist economy was an increasingly state- 
controlled one that sought to avoid inflation by controlling prices and 
wages and foreign trade. Autarkic restrictions on imports were offset 
by bilateral barter agreements. Whether the war that began two years 
after the 1937 edition of Feder's work was, as Feder's view of the role 
of international finance in the first World War would suggest, another 
effort to punish Germany's financial independence under National 

20. According to Henry Liu: "through an independent monetary policy of sovereign credit and a 
full-employment public-works program, the Third Reich was able to turn a bankrupt Germany, 
stripped of overseas colonies it could exploit, into the strongest economy in Europe within 
four years, even before armament spending began" (Henry C.K. Liu, "Nazism and the German 
economic miracle," Asia Times Online, 24 May 2005, 

21 . Hitler's eagerness to rearm Germany is not surprising in the light of the eastern expansionist 
and anti-Bolshevist foreign political aims outlined by him already in Mein Kampf, Vol. II, 

22. R.J. Overy, The Nazi Economic Recovery 1932-1938, Cambridge: Cambridge University 
Press, 1996, p.43. 

23. Ibid, p.3 

24. See the web-log by "Scanners", "Gottfried Feder und das zinslose Geld", http://www.utopia. 
de/blog/umweltpolitik/gottfried-feder-und-das-zinslose. The western financial powers may have 
partly supported Hitler's effort to check the westward spread of Bolshevism. For American 
involvement in National Socialist finance, for example, see Anthony C. Sutton, Wall Street and 
the rise of Hitler, Sudbury: Bloomfield Books, 1976. 


The German State 

Socialism or whether it was indeed secretly willed by the international 
financiers for their own geopolitical ends, the increasing losses 

suffered by Germany in the course of it certainly provoked Hitler into 
attempting to "sweep the foreign spectre away with a bloody broom", 
as Feder had predicted. 

But neither Feder nor Hitler may have foreseen the severity of 
the revenge - more cruel since more lasting than that after the first 
World War - that the international Jewish interests would take on 
Germany after its defeat in 1 945. While Feder hoped that other nations 
of the world will also eventually follow the German example and 
"mankind, freed of the Jewish oppression, will experience an age of 
unprecedented prosperity - and, above all, Germany - the heart of the 
world", the opposite of that indeed has occurred, since most of Europe 
has been turned into "a slave, fellaheen, bondman and servant of the 
all-Jewish world-power" (p. 35). And the heart of Germany itself, 
drained by a tyrannical psychological control of its population, has 
virtually stopped beating. 


The German State 

on a national and socialist foundation 

The German State 



Adolf Hitler 

Every great idea needs two things, the will to power and clear goals. 
The will to power, to liberation, lies glowing and strong in our hearts, 
Gottfried Feder has in his book, The German State on a national and 
socialist foundation, presented our goals clearly and simply and in 
a way understandable to everybody. In it the hope and longing of 
millions has found a form and powerful expression. The literature of 
our movement has in it obtained its catechism. 

Munich, 8 November 1 923 . Adolf H itler 


Gottfried Feder 

to the fifth edition 

Here my work, The German State on a national and socialist 
foundation, appears within the series of the "National Socialist 
Library". The text has remained essentially and basically unchanged 
but the passages that referred to circumstances of the time when this 
work appeared (1923) and borrowed examples therefrom were deleted 
and the explanations of the Jewish question shortened since a special 
work will be dedicated to the latter. 

The new edition should especially give evidence of the fact that 
nothing in the least was changed in the basic programme. 

Murnau, October 193 1 Gottfried Feder 


The German State 

Blessed are the people to whom a stark necessity 
imposes a lofty political idea which, 
being great and simple, 
forces every other idea of the age into its service. 

Heinrich von Treitschke 


Gottfried Feder 


to the first edition 

We look into the future full of strong hope and longing. Germany 
will live, Germany cannot go down. Germany is shaken as if by the 
overpowering birth-pangs of a new age. The horrid shackles of self- 
guilt, as well as the foreign tormentors, will fall away and will be 
shaken off with a powerful shrug, and Germany will march at the head 
of the nations. 

If so much suffering and distress were not connected with the 
collapse and downfall we would be able to participate with a certain 
feeling of happiness in the days of creation of a new age. If we cast 
our glance upon the degradations of the day, on the confusion of the 
present, we see everywhere a powerful will, serious work, inspired 
intuition. The German soul moves its wings to a new high flight. 

The tasks today are powerful, greater and harder than ever in the so 
painful history of the Germans. 

So it is necessary to solve the twofold task - not just to "rebuild" 
the state and economy - but to give them a new form. And a new form 
thereby also for the cultural and intellectual life of our people. 

The old German longing for a united Germany must finally become 
a reality, a new economic law will arise and sweep away the nightmarish 
form of interest capitalistic economics. 

So comprehensive and overpowering are the tasks that await us. 
Grave and admonishing stands the spirit of the past behind us; filled 
with awe before that which has occurred historically, on the solid 
ground of the best German tradition, based on the earliest Aryan 
wisdom, the people and the state, economics and culture must be 
created anew. 

Here the workers must be conscious of their enormous responsibility, 
indeed they are borne by the hope of the entire nation - towards 

But the National Socialist idea is much more than only a return or 


The German State 

a detour into old ancestral customs, it breaks the chains of the Marxist 
state and economic form, it, as the first and most determined idea, 
consciously fights the hardest battle against the Mammonistic powers, 
against the world-encompassing power of the all-Jewish imperialism, 
against the spirit of rapacity, selfishness and indifference. 

This universal and great German freedom movement finds its most 
powerful, strong-willed and goal-conscious campaigner in the National 
Socialist German Workers' Party. The party has outlined its goals in 
a short programme that summarises in a pithy way the fundamental 
demands of the movement in 25 clauses. Alfred Rosenberg, the chief 
editor of the Nationalist Observer^ the polemical organ of the 
National Socialist movement of Greater Germany, has, in a manner 
worthy of thanks, explained the programme points individually in a 
short work. 26 On the basis of this work it is at least possible to say 
to friends and enemies what the National Socialist German Workers' 
Party wants. On the other hand, there is lacking in the literature of 
National Socialism a comprehensive work that would give an account 
of the political and economic ideas from which National Socialism 
proceeds, what paths it intends to forge with regard to national politics 
in order to arrive at its final goal, that of the National Socialist German 
state, the state of work and performance. The present work wishes to 
fulfil this task. We will therefore have to illumine the point of departure, 
the way and the goal of National Socialism, we shall show wherein the 
German National Socialist state will essentially differ from the existing 
state, which fields will remain essentially untouched, on which fields 
there will be substantial reforms, and where essentially new paths will 
have to be entered upon. 

We shall have to seek and reveal new ways for public life, 
especially for the national financial policy, for the treatment of the 
racial question and the questions connected with it. We shall further 
have to fundamentally deal with hostile objections, distortions and lies 
that have already become loud. 

25. [The Volkischer Beobachter was bought in 1 920 by the NSDAP as the organ of the party and 
edited by Dietrich Eckart until his death in 1923, when it was led by Alfred Rosenberg.] [N.B. 
All notes in box-brackets are by the translator.] 

26. [Rosenberg first published his Wesen, Grundsdtze und Ziele der Nationatsozialistischen 
Deutschen Arbeiterpartei. Das Programm der Bewegung in 1923.] 


Gottfried Feder 

The task that we have set to ourselves is extremely great and yet 
only a small part of the entire scope of Germany's renewal. 

All effort would be in vain if a determinedness unto death and 
the unrestrained will of a leader did not work for the efficacy of the 

The strongest will would be wasted uselessly if we did not bear 
in our hearts unshakeably a clear image of what this German state - 
Germany, the land of our fathers and children - should look like in 
accordance with our will - after our victory! 


The German State 

I. The Foundations 
The moral foundations 

The foundation of National Socialist statecraft is complete 
responsibility with regard to the people and with regard to oneself. 

"Public interest before self-interest" is the first law of National 

It may seem strange that such a principle must be generally 
established for a state, for we recognise from history periods in which 
the welfare of the whole was in the mind of the rulers as the foundation 
of their state leadership. If it is necessary today to set this principle 
before all other considerations, this is only the expression of the fact 
that the present-day public conditions are anything but the expression 
of this sole correct political sentiment. We see equally in this first 
principle how intimately morality and economics are involved with 
each other. 

Public interest before self-interest is first a moral demand. But 
it expresses at the same time with excellent linguistic clarity the 
hierarchical ordering between the welfare of the whole and the justified 
striving of the individual for personal acquisition and property. This 
National Socialist principle therefore in no way excludes private 
property. On the contrary: National Socialism acknowledges fully and 
completely the significance of property. It knows that personal property 
and a right to dispose of an acquisition freely is the foundation of every 
economics and, beyond that, of every higher culture; but National 
Socialism has recognised equally that for the acknowledgement of 
private property it is necessary to draw quite definite limits, that is, 
where property becomes a mere instrument of power and is applied in 
an exploitative way against the welfare of the whole. 

There is perhaps hardly one seriously thinking person who would 
like to contradict this first principle in this general form. The difficulty 
will lie in the right assessment of public interests against those of 
the individual private person. In spite of the doubtlessly existing 


Gottfried Feder 

agreement that the considerations of the public interest have to go 
before the private interests, remarkably there has been, according to 
the legal ideas valid among us, precisely with regard to the form of the 
use of property, no moral limitation determined beyond the criminal. 
It is, to be sure, forbidden to act with violence against one's fellow 
man (extortion - murder - manslaughter - betrayal and illegitimate 
enrichment, etc.), but it has never and nowhere been forbidden to pile 
up immeasurable wealth and to make use of the often quite dubious 
banking and stock-exchange technical means therein. Further, the 
law gives every creditor the right to ruthlessly deprive a delinquent 
debtor of his home and possessions when adverse conditions - illness, 
death, malformation, bad harvests and famine - make the fulfilment of 
incurred obligations impossible. Every experienced judge can relate 
numberless cases in which our rigid law has destroyed economic 
existences in cases in which every healthy sense of justice has revolted 
against delivering a hardworking, diligent man who has, however, 
been dogged by bad luck temporarily to the brutal pressure and grasp 
of the creditor. 

The limitless acknowledgement of personal right to properly and 
legal claims on the whole must logically lead to the damaging of the 
public interest through the selfish exploitation of this basically inverted 
anti-social legal idea in opposition to our state principle "Public interest 
before self-interest". 

In contrast to the false fundamental formulation ruling among us, 
the capitalistic, is the other extreme, the Marxist idea of the state and 
economics. The fundamental idea of this economic form is the denial of 
private property. The Marxist doctrine goes so far as to explain property 
directly as "theft" (Proudhon). 27 It demands, in the foreign jargon that 
is so unclear especially to German proletarians, the "expropriation of 
the expropriators" 28 - in other words, the dispossession of property! 
This state-, people-, culture- and economy destroying doctrine has 
found its extreme but logical realisation in Russian Bolshevism. In its 

27. [Pierre Joseph Proudhon (1809-1865) declared in his 1840 work Qu 'est-ce que la proriete? 
that "la propriete c'est le vol".] 

28. [This phrase, borrowed from the French 'T expropriation des expropriates", is used by 
Marx in Das Kapital, I, Ch.24: "The final hour of private property strikes .The expropriators 
are expropriated".] 


The German State 

economic aspect this extreme can be summarised in the sentence: 
"Everything belongs to everybody". 

We have here to do with a depersonalisation of property, with a 
transfer of all property to the anonymous property of the whole. 

The extreme still ruling among us of an unlimited right to property, 
on the other hand, has led us already to the last step before the 
temple of the god Mammon, on whose door stands in golden letters: 
"Everything belongs to the One". Even this frightening economic 
form must equally lead to a depersonalisation of property - only in 
another way - in that, finally, all of working mankind is here pressed 
into a frightful debt slavery to an anonymous financial power. 

In starkest contrast to the just described economic extremes of 
Marxist socialism and high capitalist Mammonism of the western 
democrats, the economic ideal of National Socialism demands the 
realisation of the principle, "To each his own ". 

Precisely in this principle are morality and economics once again 
most intimately interconnected. The removal of moral principles 
from the commercial life is indeed so characteristic of the present- 
day economy in which just the superior power of greater possession, 
greater cunning, the art of avoiding the state authority even in the 
most hazardous dealings, tips the balance. A glance at the thousands 
of mostly dark existences that conduct their mischief in all big cities, 
who dispose of fantastic sums, a glance at the several suits that come 
to a trial in spite of all the resistance of the participants, shows us how 
frightfully depraved the present-day commercial morality is. Let us 
consider, in contrast to that, the frightful misery in the circles of the 
middle-class and of the married working people who can no longer 
pay for milk and bread for their infants and growing children, let us 
be clear that generally in many, many cases with honourable work 
hardly the basic necessities for life can be earned, especially when 
there are children to be looked after and raised. The distress of the 
intellectual and free professions exceeds all measure; artists of the 
very first rank, especially when their orientation does not correspond 
to the Jewish orientation of taste that rules today, are flatly delivered to 
hunger; genuine German poems can achieve no public performance. 
But quite indescribable is the distress of those who have, through 


Gottfried Feder 

the mismanagement of the state with regard to financial policy, been 
cheated of their savings, the small capital pensioners and retirees, the 
war disabled, those forced to charity help, as well as all those who 
have relied on the certainty of public bonds as well as on the stability 
of our national currency and the gold coverage of the mark. 

Such a condition is a decomposition of the economy - anarchy. 
Industriousness is repaid with insufficient remuneration, laziness 
is rewarded, honourable trade suffers distress, unhealthy trade, 
intermediary trade, profiteering prosper best of all. The more superior in 
cultural aspects a production is so much the worse is the remuneration 
that can be obtained. Trust is repaid with betrayal, and indeed by the 
state, which should be the protector of law and justice, the attorney of 
public morality. 

We do not at all need any more to point to the corruption in public 
life, the judaisation and the impoverishment of the press and the 
miserably powerless and unworthy leadership of our foreign policy to 
indicate the extreme debasement of our public life and our economic 

Against this materialistic impoverishment and contamination 
of the public life the National Socialist idea of the state sets the 
long tested principle of state and economy: "To each his own ", but 
above all "Public interest before self-interest" . With the raising of 
this principle to the guiding principle of the National Socialist state 
National Socialism binds itself to the best and most glorious periods 
of German history. 

"Suum cuique" 29 was already the economic principle of the 
healthy German early Middle Ages, but especially for a long period it 
was ensured through the ordering of the guilds that to each was allotted 
his own. The commonalty of work between master and apprentice for 
half or a third of a penny at least ensured the worker his income, better 
work and performance found their acknowledgement and their reward 
and, in cases of outstanding performance, fame and rich earnings. 

"Suum cuique " adorns also the highest Prussian order, the Order 
of the Black Eagle, though here in the special sense that to special 
merit is due its crown. Precisely this interpretation corresponds quite 

29. [To each his own] 


The German State 

especially to National Socialism - not so much because it is here a matter 
of courtly decoration pieces or the one-sided honouring of military 
service but because the moral content of the rewarded fulfilment of 
duty with regard to the state and people finds its expression therein, a 
fulfilment of duty which is done selflessly without design and without 
a previous regard for clinking wages, with a relegation of personal 
interests to the background, born of an inner compelling feeling of 
responsibility towards the state and the people. 

We National Socialists extend this principle also in the other 
direction, we add to the "to each his own" of the German Middle 
Ages and to the idea of "To merit its crown" of Friedrich's state, with 
greatest emphasis: "To the criminal his punishment! ". To each his own, 
to merit its crown, to every orderly and honourable work its adequate 
payment, to every special performance its higher remuneration, to 
every poor person and every person who has fallen innocently into 
distress sufficient help from public funds, but equally to all those who 
act against public morality and economic respectability - the deserved 

However, we stress that it does not in any way lie within the scope 
of duties of the National Socialist state to supervise the state citizen 
individually in economic matters, that the economy prospers best free 
as far as possible from bureaucratic tutelage. We know also that a 
decrease of risk in the case of every individual state citizen through 
the state - rather in the sense of Naumann's "risk-free man", that is, 
of a man for whose basic existence the state should provide - would 
achieve precisely the opposite of that which Naumann expected of 
it. 30 The duty of the state must be limited to creating the preconditions 
for an economy which holds itself as free as possible from the frightful 
usurious phenomena which we know in the present-day interest 
capitalistic state. 

The welfare of the state must therefore become once again the 
highest law, the efficiency of the state must set the principle "Public 
interest before self-interest" before all other considerations. 

30. [Friedrich Naumann (1860-1919) was a Protestant theologian and liberal politician who 
founded the in 1 896 and propagated a form of social liberalism through his journal Die Hilfe. 
After the first World War, Naumann became the first chairman of the Deutsche Demokratische 


Gottfried Feder 

Now this principle however makes necessary among the statesmen, 
the state employees and those who stand in outstanding positions 
in the public life, a characteristic that has today almost completely 
disappeared from government and public life - responsibility. 

Our entire public life stands today directly under the sign of 
irresponsibility. The delegates are not responsible for - one says 
"immune to" - what they do and speak in parliament. A desperate term 
when one remembers that this expression is taken from medicine in 
which it is said that a body is already so saturated with poisons that 
newly infused poisons harm the body much less or not at all whereas 
a healthy body would die of them. The fractions are not responsible 
for the decisions of the majority, the ministers are not responsible 
for the discharge of their office for they are only functionaries of the 
parties that participate precisely in the formation of a government. If 
something goes wrong, the people indeed suffer the worst damages, 
but the so-called responsible minister is only replaced by another 
equally irresponsible party functionary. Of real responsibility there is 
no mention. 

Already the appeal to the Almighty in the age of the divine right 
of kings was unfortunately only too often a quite special form of 
the irresponsibility of the ruling lords - (rare exceptions for whom 
the responsibility to their god was synonymous with their feeling 
of responsibility towards their people are expressly acknowledged). 
In general, however, this dear god was always, in the final analysis, 
only a comfortable protective shield behind which could hide, on 
the step-ladder of the official responsible only to his superior, of the 
minister responsible only to his king and of the ruler responsible only 
to his god, the most incredible irresponsibility of the ruling class and 
its representatives with regard to the actual life-necessities of the 

National Socialism will have to radically clear away this state 
sanctioned irresponsibility. 

'Highest responsibility'' will stand in iron letters over the entrance 
gate to the National Socialist state. One who has the honour to stand 
in a leading position for the interests of a great people cannot be 
reminded strongly enough of his responsibility. Indeed, only he can 


The German State 

be a leader who bears this deepest feeling of responsibility in his 
breast. For all state employees and for those who stand in public life 
this responsibility is to be especially stipulated and also carried out 
with ruthless strictness. Only in this way can a recovery actually be 
compelled, so to speak. Only in this way can the most precious thing 
be revived and grow that may allow the leader and the people once 
again to become a real national and historical community - trust. 
And from trust then can the faith grow once again which, with the 
responsibility of the leader, will bring forth a recovery and renewal of 
Germany, a reawakening of the German soul, in a nationalist state of 
work and performance in which each will find his own. 


Gottfried Feder 

The economic foundations 

In a healthy economic body morality and national economy cannot 
be separated. Otherwise the economy suffers in the most severe 
manner, especially with respect to the most honourable task of every 
economy - the fulfilment of demand. Without faith in commerce, 
without industriousness, without the loyalty of the officials and 
workers no work can prosper. Efficiency, justice, entrepreneurial spirit, 
energy, mutual trust between all taking part in an economic task are 
the indispensable preconditions for the prospering of every economy. 
All these things need to be said only to be acknowledged in their 
exceptional significance. Everybody who has had to be economically 
active in the present and the recent past knows to what extent these 
fine things are lacking today. And who finally suffers the damages 
of the salvation doctrines of Marxism and its operational methods, 
the strikes, sabotage and negligent and slovenly work? - But in the 
end only the population itself which, through such state- and people- 
disintegrating doctrines, lost all feeling of community and sees its 
most important work in class-struggle. Therefore to this quarter must 
also be directed the complaints which ring out especially from the 
nationalist camps that we are no longer a people, that we should first 
become a people once again if we wished to reacquire our lost position 
of power and international standing. 

These complaints are justified, but with complaints one does not go 
forward. Marxism did not hesitate to realise its economic and political 
ideal when it had the power to do so, it did not shy away from brutal 
suppression of dissidents: in Russia it silenced its enemies forever by 
slaughtering the entire bourgeois intelligentsia, among us through the 
laws for the protection of the republic.31 The acquisition of political 
power is obviously the precondition of every economic or national 
political reform. That we know as well as the Communists and the 

3 1 . [Post-war Germany has a similar law, the Federal Law for the Protection of the Constitu- 
tion (Bundesverfassungsschutzgesetz), which was passed in 1950.] 


The German State 

Social Democrats, but we want political power not for its own sake, 
not to exploit the acquired position of power against a certain class but 
to create the preconditions for an economic peace among the national 
comrades bound together into a work community. The fulfilment of 
demand 32 is the task of the national economy - not profitability, 
which is today almost solely decisive in the production of goods. 
With this fundamental attitude of National Socialism we enter in 
definite opposition to the basic economic ideas of the capitalist state. 
Not what was necessary was produced in the first place but what was 
profitable. Any thing that did not promise to yield sufficient interests 
and dividends was from the start not taken up. As an especially clear 
example of the profitability madness of the present interest capitalistic 
economy may serve the fact that housing construction, in spite of the 
frightful need for housing - thus in spite of the most urgent need - 
is simply not carried out because it is not profitable! That housing 
construction considered in a national political way in a higher sense 
would indeed be profitable requires in this place no further explanation 
but is straightaway clear from what has been said especially with 
regard to the social tasks of the state. Further, if the people hunger 
and freeze, then a capitalist economy directed to profit does not in any 
way see its duty in fulfilling this need through the production of cheap 
and good shoes, clothes and underwear, etc., for with the lowered 
purchasing capacity of the population this is not "profitable". On the 
other hand, the luxuries industry in all fields is fully busy, for never 
before was effortlessly acquired wealth so eager to surround itself with 
sheer luxury as today. But the capitalist idea of profitability actually 
becomes an economic nonsense in the branches of our economy that 
today rule everything, in the banking and stock-exchange system. 
The fact of the ruling position of the banks proves most strikingly the 
economic senselessness of the capitalist idea. With the "productions" 
of the banks and stock-exchanges never yet has a child been fed, 
never yet has a freezing person been clothed, in general never has 
even the smallest requirement that is necessary for life been supplied. 
This statement is not at all a demagogic catchphrase, it does not even 

32. By fulfilment of demand is to be understood the satisfaction, through affordable prices, of 
the life necessities of the totality of all those bound together into a national community . 


Gottfried Feder 

include the dispensability of the institutions of monetary transactions, 
it only shows with all clarity what an enormous difference there exists 
between a really national economic fulfilment of demand, such as 
National Socialist wishes, and a completely private-capitalistically 
oriented profit-based economy. 

Even the National Socialist state will have its banks and other 
financial institutions, but they will no longer be the rulers of the 
national economy but their servants, money will no longer be the lord 
of the state and people but only the necessary aid for the exchange 
of goods. We know precisely that this battle against the bank- and 
stock-exchange capital will mean the hardest battle for the National 
Socialist movement because today the most enormous plenitude of 
power that the globe has ever borne is concentrated in the bank- and 
stock-exchange capital. Here it is a question of a life and death battle 
for power, this the opponent knows better than most of our friends 
and followers. This battle will be so much more difficult in that entire 
sections of the population are still caught in the profitability madness. 

A fundamental question which should be answered in this place once 
again with all clarity is the question how National Socialism basically 
stands in relation to property. From the fundamental observations of the 
first chapter and especially from the fundamental opposition described 
there to Marxist Socialism there results with natural consequence for 
National Socialism the fundamental acknowledgement of property. 
This acknowledgement of private property is too deeply anchored in 
Aryan life. The creative mind which recognises the environment, which 
contemplates the environment in order to create and form therefrom 
its world, the creative man who wrests its fruits from the earth through 
hard work, who settles down, builds for himself homes and cities, who, 
having become settled and rooted in the circle of his kinsmen, his racial 
comrades, the man who then proceeds on such an infrastructure rooted 
in the soil to higher culture and creates for himself his - the - world in 
a higher intellectual sense, in the fields of philosophy, poetry, music, 
art and sculpture - this man certainly cannot conceive of it differently 
than that the works of his hand, which have been born out of his own, 
are also his property. From this knowledge of the creative man arises 
directly the respect for the property of others, and law arises. 


The German State 

In fundamental and irreconcilable opposition to the creative mind 
stands the avaricious thieving mind of other men disposed differently, 
who have never known the breath of creation, who move restlessly 
from place to place, who could never put down roots anywhere, who 
did not rise expansively, and from the soil, in a long development to 
ever higher culture but, with their restlessly moving mind and with 
their money, moved from country to country, when they had "grazed" 
the individual cities or tracts of land. Even in the fields of the creative 
nations the Jew essentially stood quite far removed from the actual 
productions, we do not know the Jew as a farmer, not as tradesmen, 
not as engineers or master-builders, not as factory- and wage workers, 
and true creative genius is foreign to him even in the fine arts and in 
the sciences. The moving mind begins its characteristic activity only 
where a work has been created by a creative hand, an object has been 
produced, there the avaricious mind knows to procure these goods for 
itself and to move them to its pecuniary advantage. Not to supply the 
national economic demand but to strike as high a profit as possible 
for itself from this traffic of production to consumption it set itself up 
between producer and consumer - the trader arose. Today the trader 
and money-changer has become the board of directors and banking 
lord. The economy of the entire world has been turned upside down 
in the most senseless manner. The clever, inventive, daring, creative 
and productive mind no longer rules; the crooked mind, incapable of 
creating anything of its own, exploitative and avaricious, rules. Money 
rules over work and blood. 

The moving mind of the Jew has been able to make everything 
mobile, even the land through mortgages, the largest long-established 
industries through anonymisation and through the stock company, 
and, through the state bond economy, international capital has even 
separated the governments from their peoples. Today the governments 
are all dependent on large loan capital and in relation to their peoples 
they are only the interest collectors for their anonymous lords in Wall 
Street, the City of London and Paris. 

These brief observations have shown us the deepest secret of the 
irreconcilable opposition between creative peoples and the avaricious 
Jew. "The Aryan creates, the Jew grabs the world for himself. 


Gottfried Feder 

Here it may be briefly added further that there exists a very fine 
difference between property and possession. Possession need not at all 
necessarily be property, possession cannot be self-created. In the case 
of a possession the origin of the possession is not questioned. The Jew 
has seized possession of the property of the Aryan peoples and now 
rules the creators through his financial power. This abstracted form of 
property in the form of legal claims, bonds, mortgages, etc. has made 
the entire world today subject through interest to capital. The interest 
capitalistic economic form generally knows no limits of possession, it 
suffers entire nations with all their work to become subject to interest 
to a handful of bank- and stock-exchange magnates. 

Against this not a little frightening interest-capitalistic robber 
economy National Socialism sets the limitation of the right to property. 
The principle for this limitation lies in the sentence: "Public interest 
before self-interest". That this limit for property moreover can be 
raised very high emerges from the fact that National Socialism will 
not in any way reject even the largest industrial works, so long as they 
remain in the private possession of the creators (we think of Krupp, 
Mannesmann, Thyssen, etc.), as contradicting the interests of the 
whole, especially when the owners of these large works have a feel 
for and understanding of social questions and are able to find the right 
limits between appropriate self-gain from production, an adequate 
pricing for the sales and the fulfilment of demand of the national 
economy, and a corresponding and worthy form of participation of the 
workforce in the revenues of the works. 

Here we come to brief fundamental observations on the external 
forms of production. The powerfully rising German economy before 
the war was distinguished by a very fortunate mixture of big-, medium- 
and small businesses. Now, in general, in the tendency to big business 
there indeed lies a danger for the national economy insofar as the next 
step above the big business, the 

no longer serves the fulfilment of demand but the high capitalistic 
interests of the domination of the market and of the dictatorship of 
prices. Nevertheless it is plainly conceded that certain industries can 
work only as big businesses. This applies to those industrial branches 
that we generally designate as heavy industries. Without wishing to 


The German State 

go into details at this point it may be basically stated that the National 
Socialist state has no reason to strive for fundamental changes in these 
external forms of the economy. National Socialism rejects all sorts of 
"socialisation or nationalisation" in the Marxist sense. Our economic 
ideal demands as large a number of economically free existences 
precisely in the medium and small businesses. We know that only the 
free and independent men who can freely dispose of their work and 
their work income are filled with a serious feeling of responsibility with 
regard to their work, that only on this soil do powerful personalities 
arise and that only on the soil of freedom and responsibility prospers 
the sense of the community which unites those bound through common 
work to a community of life and destiny and therewith makes them a 
free, self-conscious nation. Only on such a soil can the welfare of the 
individual be united with the welfare of the whole. 


Gottfried Feder 

On the boundaries of the state and the economy 

Manchesterism 33 and State Socialism are the polar opposites 
when it comes to establishing the limits which the state must observe 
in its intervention in the economy. The first doctrine demands as 
much freedom as possible from every state guardianship, it would 
like best to see the state relegated to the role of a night-watchman. 
State Socialism believes that most businesses are best conducted and 
administered by the state itself. The most extreme forms of socialisation 
or nationalisation, which is the Russian term for the running of the 
enterprises by all, have shown to everybody who has observed the 
Socialist experiments impartially, with conclusive clarity, that such 
Communistic forms of production are in the long run unfeasible. One 
who has followed our explanations of the foundations of the economy 
will be able to recognise without difficulty the inner reasons for this 
phenomenon. On the one hand, the suppression of the entrepreneurial 
initiative, the lack of the profit motive, the removal of competition, 
on the other hand the compulsion to work which was exercised with 
ruthless force by the Soviets must reduce the advantage of production 
to a minimum. 

The gradual, milder form of "state-control" of businesses as we 
know it from our German economic life is to be applied successfully 
to advantage only in different fields of the public economy. In the fields 
which are conducted in competition with the free economy, especially 
in the field of large industrial production (coal), the commercial success 
is strongly limited in comparison to the free economy, which is in a 
position to take all important decisions more quickly and independently 
than is necessarily possible in the case of state enterprises. In order to 
have a right judgement of what businesses are in general suited for 
state control, we must be clear of what position the state assumes in 

33. [Manchesterism is the school of economic thought that arose in the 19th century in 
Manchester as a reaction against the protectionist Cora Laws of 1815 and 1846. It advocated 
free trade and supported the industrialists against the agrarian interests of the landed aristocracy. 
The principal proponents of this movement were Richard Cobden (1804-1865) and John Bright 


The German State 

the total operation of a national economy. 

We have explained that National Socialism sees the task of 
economics in the fulfilment of demand. Producer and consumer, 
manufacturer and user, are the two chief participants in every 
economy. Now we know that the use is, in the final analysis, always 
and everywhere purely individual, or expressed very clearly: every 
piece of bread can indeed be consumed only by one person, clothes 
are also destined only for personal use, a fiat provides at any time a 
roof only to a small, connected circle, the work-place gives at any 
time a position to only a perhaps greater but still limited number of 
work comrades, so we cannot at all speak of a common consumption 
or use of products. If therefore consumption is, in the final analysis, 
individual, the same is true also of production, of the production of 
goods. The more valuable the product of productive work is, the clearer 
it is that this arises only from a highly personal creative force. For the 
works of the mind in the fields of science and the fine arts, in the 
field of technical inventions and discoveries this is immediately clear, 
but even in the case of assembled work in factory-like enterprises, in 
which the mechanisation through machines suppresses almost entirely 
human individual work, it is finally still valid that the pair of shoes 
that precisely this worker manufactures can be manufactured only by 
this one and not by another. The quality of the products however sinks 
with increasing mechanisation. Already in the agricultural business 
the old rule is valid: "The eye of the lord fattens the cattle", that is, 
only the personal care of the breeder obtains the highest results. 

All attempts of the Communist economy have ended every time 
in a complete failure. We must therefore declare fundamentally that 
both consumption and production go against socialisation. Now, as 
soon as mankind abandoned the original economic forms of individual 
economy in the family and moved to more complicated economic forms 
through division of labour and had formed great state communities, 
there intervened between production and consumption something new 
— trade and commerce and the financial system. 

This very plain economic philosophical observation gives us 
the clearest evidence of the fields in which the state has to limit its 
economic activity. It is indeed immediately clear that it is here a 


Gottfried Feder 

question of matters in which every individual is equally interested. 
And it is only logical that here the state will find its scope of duties as 
the embodiment of the common interests. 

If our economic philosophy is right, the state must have performed 
something exemplary in one of these fields in case it has tried its hand 
at one already. This it has also performed in the field of transport. The 
performances of the German railway authorities before the war were 
just exemplary, and they are that even today to the extent that the old 
fidelity to duty and conscientiousness still rule. One also often credits 
the non-state railway system in America with special perfection; this 
is also accurate in a certain context insofar as the traffic occurs rather 
more freely, and many small difficulties which are with us bound 
to the bureaucratic system could hardly have been avoided. Even 
the building of locomotives of great dimensions in America evoked 
astonishment amongst us earlier, but the chief reason for this was 
that the broader gauge of the American railway network made this 
indeed more easily possible technically. But this is not an aspect of 
transport but a technical fact which does not belong to the scope of 
our observations. On the other hand, much more important for our 
question is - the security of the transport in the railways. In this field 
the German railways were constantly aware of this uppermost task of 
the state transport and can also claim the reputation for itself for having 
done, technically and organisationally, everything that was possible. 
With what irresponsible recklessness the life of the passengers was 
endangered in this field precisely in the American and French railways 
emerges from the history of railway accidents on American railways 
and on French railways before the nationalisation, as long as these 
served the reckless pursuit of profit of the Paris Rothschilds. - Even 
here therefore we see once again the fundamental opposition between 
the capitalistic idea of profitability and the idea of duty of the demand 
fulfilment economy. 

The task of commerce is, in the first place, to serve the national 
economy through the secure, quick and cheap transfer of goods and 
persons to the places of use or work. The question of profitability comes 
only in the second place in a state enterprise, or it is only a question 
of tariff policy. To commerce belongs naturally also the post and 


The German State 

telegraph system. Even here it requires only the honourable memory 
of the performances of the German post and telegraph administration 
to show how securely, quickly and reliably this important national 
economic task was fulfilled by the state. 

Trade, on the other hand, has always been considered as the 
exclusive task of private entrepreneurial initiative. Now, trade 
cannot be spoken of so unequivocally as the transport system. For 
a state regulation there comes into consideration from the start only 
a certain type of goods, indeed mass-consumption goods. As little 
understanding as one could expect before the war of a state regulation 
of trade in the most important food products - since the free trade 
doctrine ruled our national economic way of thought -, so little can 
one expect today, in view of the shameless usury in the most important 
food products during the still unforgotten post-war period, that the idea 
that it is the task of the state to provide for the preparation, transfer and 
distribution of the most important food products will fall on fertile soil. 
Exceptionally we do find, even among our antipodes in the economic 
field, the Bolshevists, attempts to solve this problem, that is, through 
the state control of production and its distribution. What is wrong 
there, as we have already shown, is wanting to conduct the production 
or to understand it always in a state-controlled way. On the other 
hand, the right distribution of the production is doubtless an especially 
important state task. It is remarkable that in Russia the only bourgeois 
organisations that have remained preserved were the agricultural 
production and consumer cooperatives, thus, in other words, those 
organisations that had precisely set themselves the task of storing and 
collecting the most important food products in the common interest 
and, on the other hand, of supplying the consumer in the common 
interest. A survey of our German economic life shows us now that, 
even among us, this idea is not completely new but that the cooperative 
idea has been increasingly taking hold everywhere and therewith 
creating the preconditions that National Socialism has in mind for the 
regulation of this extraordinarily important question. The cooperative 
utilisation of agricultural products ensures, on the one hand, to the 
farmer the removal of his products at adequate prices, it ensures the 
cooperative purchase of fertilisers, agricultural implements, etc., and it 


Gottfried Feder 

especially makes attempts to ensure the fulfilment of demand through 
the establishment of agricultural warehouses. On the other hand, the 
consumer unions have for their part taken completely practical steps 
to supply the products to the consumers as directly as possible and 
above all with the suppression of intermediary trade. A merging of the 
production cooperatives and the consumer cooperatives under state 
supervision is destined to solve this question. 

Even here the core of the question is once again: Not profitability, 
but the fulfilment of demand is the first task of the economy. 

For trade there remains more than enough to occupy it especially in 
all the fields where the personal factor of risk comes into question. For 
a food product which is secure always, and in all the circumstances of 
the sales, the factors that characterise the businessman are from the 
start eliminated. 

The financial system is the third and most important thing that is 
to be brought under state regulation. Money is explained by many 
financial theorists as a means of exchange for the exchange of products; 
this explanation is indeed not false but also not comprehensive and 
not clear. Nevertheless this definition expresses the right feeling 
that money is an aid for the traffic in goods. The fact that the state 
claims the privilege of coinage for itself already proves that the state 
considers money as an especially important field of public life. The 
fact that the state has produced an entire series of sections in the penal 
code that deal with counterfeiting proves similarly that it is a matter 
of a public matter of the first importance. In fact the state has also 
for a long time determined through its own authority what is to be 
valid as money in public commerce. A special orientation of financial 
theoreticians - the Chartalists 34 - represents the state theory of money 
which summarily declares: "Money is what the state declares to be 
money". Therewith money is entirely separated from the substance 
of money, and the seal of the state sovereignty is sufficient to make 
"money" from iron, aluminium, porcelain and, above all, paper. The 
present teaches us that this theory has in fact become reality. The 

34. [Chartalists support the use of fiat money or government-issued tokens (Latin: charta) as the 
national currency.] 

35. [Metallists hold that money derives its value from precious metals and oppose fiat money as 
having no intrinsic value.] 


The German State 

opponents of these financial theoreticians - the Metallists 35 - cling to 
the old idea that money must have an inner value, thus must be from 
precious metal (gold and silver). The relations of the present do not 
bear this orientation out for, in fact, the state even makes money out 
of paper, and indeed money with which one can really buy something, 
even when the banknotes are made of quite worthless paper. But 
the question of the purchasing power of this money is another story. 
Here the sinking purchasing power of money that stands in inverse 
proportion to the swelling amount of paper money seems to prove the 
Metallists 35 right, for actually the coins of gold and silver have not 
caused the loss of purchasing power of paper money. But this is due 
to another reason, namely to the commodity character of gold money. 
Not because the gold money is real gold does it maintain its purchasing 
power but because gold money is also a commodity. The twenty mark 
coin today derives its purchasing power not at all from the stamped 
state currency sign '20 Marks' but from its content of the commodity 
of refined gold.. But we cannot linger here longer on these financial 
theoretical controversial questions, we will have to speak at greater 
length on these questions in the representation of the state financial 
system according to the reasoning of the National Socialist reform. 
Here it is a matter of recognising that the financial system, in the case 
of the question exercising us at the moment about the boundaries of 
the state and economy, belongs in any case to the fields which, as 
an eminently important matter of the entire economic life, exactly 
like commerce and trade in the most important food products, must 
definitely be subjected to the most careful fiduciary regulation on the 
part of the state. 

The importance of the financial problem in itself requires today 
no special explanation. The power of the large financial powers 
ruling everything lies manifest to anyone that wishes to see it. The 
perspicacious person has already for long recognised that precisely 
the incompetent, false manner in which the state has positioned itself 
with regard to the financial system is the basic reason for the present- 
day catastrophic conditions in the state finances. The fact that most 
of the so-called state central banks are not at all purely state institutes 
but stock companies in which the governments have retained for 


Gottfried Feder 

themselves only certain supervisory rights already gives an idea of 
the muddled conditions in the field of the public financial system. 
In reality the nationalisation of the central banks, especially the 
Reichsbank Public Ltd. Co. (!), has virtually meant the transfer of the 
most important state sovereign rights to private capital. In addition, 
the large banks and the other financial institutions have become the 
unrestrained rulers of the entire national economy. 


The German Stale 

The national political foundations 

No state without power and, without authority, no government. 
Nothing is more self-evident, and more immediately obvious to 
common sense. One must attribute it to the entire neglect of our public 
thought if, among us in the government circles, one still believes today 
that one is able to rule at all with a total lack of military and political 

Power without an instrument of power is unthinkable; political 
power and military means of power condition each other mutually 
just as intimately as economy and morality may not be separated. In 
order to regain lost power there is only the sole means of creating a 
military instrument of power. 

How frightfully our poor fatherland has been punished because it 
has abjured the idea of power and given itself to the pacifistic fanfare 
we experience now daily and hourly. "To prevent a worse situation" 
we have ourselves surrendered and destroyed our weapons, "to prevent 
a worse situation" we have signed the Versailles dictate, "to prevent 
a worse situation" the Berlin government has said yes and amen to 
everything that was demanded of us, "to prevent a worse situation" we 
have allowed every malice, every humiliation, every exploitation to be 
enacted against us. With this shameless catchword of cowardice and 
abjectness the German people have been led into ever deeper misery. 
We fulfilled what was demanded of us, and a minister who wished to 
be a German, Dr. Rathenau 36 , dared to declare publicly: There is no 
absolute inability to fulfil, it is only a matter of how deep a people may 
be allowed to fall into distress! ! This means in other words - although 
the words of Rathenau are already clear enough: the German nation 
is completely defenceless, it is politically completely powerless, 

36' [Walther Rathenau (1867-1922) was a Jewish industrialist and politician who served as 
Minister of Reconstruction in 192 land Foreign Minister in 1922. His insistence that Germany 
should fulfil its obligations under the Treaty of Versailles provoked the hostility of German 
nationalists and he was assassinated in June 1922. The Weimar government's reaction to this 
assassination was the promulgation in July 1922 of the Republikschutzgesetz (Law for the 
protection of the republic) which Feder often refers to (see above p. 14).] 


Gottfried Feder 

intellectually it has been almost stultified, it can just continue to work. 
It has allowed itself to be burdened with such a gigantic burden of 
guilt that the members of the Chosen People can, on these reparations, 
forever lead a glamorous work- free life in all the countries of the world 
at the cost of German work. But now there exists the danger that even 
the enormous workforce of the Germans may break under the fantastic 
burden. Therefore the Germans must be kept alive constantly through 
stimulants and precisely in this way be maintained at the limit of their 
physical performance capacity that they may work summoning all 
strength always in the deceptive hope that they might one day free 
themselves from their burdens. "It is only a matter of how deep a 
people may be allowed to fall into distress!" This was the political 
sentiment of the Minister Rathenau so celebrated by all republicans. 

If we have recalled this paradigm of modern German statecraft it 
was only to confirm this so frightful example lying so close to us of 
a defenceless and weapon-less nation having to simply put up with 
everything, even every derision. Against this is valid for us the belief 
in an externally powerful state which alone can guarantee peace and 
freedom. We dispense with historical reasons, this is not the task of a 
manifesto but a matter for the historian. 

The counterpart of the idea of externally directed power politics is 
the internally directed rigid constitutional state. We came rather close 
to this ideal condition in the Bismarckian power state but in the fields 
that concerned the financial system and the unlimited recognition of 
private property and the demands that were derived therefrom our 
legal ideas stood fully under the capitalistic idea. 

It requires no special emphasis that in terms of internal politics 
National Socialism stands unconditionally on the standpoint of the law 
insofar as everybody should be equal before the law and there should 
be no differences in social orders. But an essential transformation 
must be realised with respect to the basic idea of the law which 
signifies to the German an inner need, a voluntary subordination to 
the higher interests of the whole, whereas the prescriptions of the law 
valid among us today appear simply as a commandment of power and 
indeed as commandments of a power that does not stand in the service 
of the whole but, precisely in relation to the questions of property, has 


The German State 

placed the protection of property before the protection of the person. 
The question of the new ordering of the public law will have to be 
discussed further in greater detail in another section. 

Now we turn briefly to the questions of the external state form. A 
final decision on this question is in no way urgent. It can in general 
be solved only after a quite basic purging of our internal political 
conditions. The only possible way to this internal political purging 
seems to us to be exclusively through a dictatorship which with total 
determination cuts off and burns the sources of decomposition and 
disease in our national body. 

The demands that we place on such a leader are extraordinarily 
high; a passionate love for his people, an unbending will, a virtual 
somnambulistic certainty in all his decisions must distinguish him. 
That his intellectual capacities must rise above the average is self- 
evident, but knowledge and capacities in the different fields are not the 
decisive factor. Knowledge and learning can be realised by others - 
How many men there are of high knowledge, great clarity of thought, 
of great intuition, the finest artistic talent - but if the last thing is 
lacking in them, the passionate will, the unswerving impulse, based 
on the deepest moral seriousness, then they will never stride forward 
at the head of nations, as trailblazers and leaders, to new heights. We 
think of religious geniuses like Christ and Luther, Savonarola 37 and 
Mohammed, statesmen like Bismarck and Cromwell, generals like 
Friedrich the Great and Yorck, 38 etc. The dictator must be completely 
free of all unnecessary restrictions and hesitations, for him there 
cannot be any inevitabilities, for it must be he who makes history and 
he seizes with a daring determined hand when his his hour strikes, he 
embodies the longing of the nation, and therefore he never errs and is 
borne by the fanatic love of those to whom his deed brings liberation. 

37. [Girolamo Savonarola (1452-1498) was a Dominican friar who preached against the 
corruption of the state and clergy and prophesied that Florence would become a powerful New 
Jerusalem if it corrected its moral vices. His additional refusal to support Pope Alexander VI's 
Holy League against France provoked his excommunication in 1497 and execution the following 

38. [Ludwig Graf Yorck von Wartenburg ( 1 759- 1 830) was a Prussian Field Marshal who opposed 
the Prussian General Julius von Grawert's cooperation with the French during Napoleon's 
invasion of Russia in 1812 and was thus instrumental in the formation of the Sixth Coalition 
against Napoleon that ended in Napoleon's exile to Elba in 1814.] 


Gottfried Feder 

He must be able to hate, so strongly and ruthlessly as he loves his 
people and his sacred task. In relation to his assistants and colleagues 
he stands as the first among free and equal people. 

This old German idea forms the foundation of this iron connection 
between the leader and his friends for the sake of the cause. 

He is the leader because he has proved himself, and so long as he 
proves himself. 

Every power seems as it were redoubled by his presence 

He draws forth every latent energy, 

Showing to each his own peculiar talent, 

Yet leaving all to be what nature made them, 

And watching only that they be naught else 

In the right place and time. 

(Schiller, Wall ens te in) 39 

He is strict and hard with regard to himself, he orients himself 
according to his own laws. He has time for and listens to everybody, 
but he is quite able to differentiate between the important and the 
unimportant. For the accomplishment of his goal he may not be 
afraid of blood and war, he may not rest and relax until his goal is 
reached, then he secures his creation further as far as this is humanly 
possible, but he can himself withdraw, as the dictator Sulla did, and 
thereby secures his work in a twofold manner in that he operates 
from a distance but still does not force everything through his strong 
personality to be measured by extraordinary standards; on the other 
hand, a freer and more independent following will be able to develop 
if the Titan does not constantly determine the political daily life but 
remains the leader in the spiritual sense. Such a brilliance of action and 
will distinguish the dictator who will again lead Germany to a height. 
If then the way out of the mire is found through the accomplishment 
of an extraordinary leader, the internal and external preconditions for 
an independent national life will have been regained, then the nation 
may once again decide regarding the external form of the state. 

39. [Friedrich Schiller, Die Piccolomini, the first play in his Wallenstein trilogy (1799). The 
translation is that of Samuel Taylor Coleridge]. 


The German State 

Our view of the future state form will be essentially influenced 
by the manner in which certain forms of the public life, especially 
the suffrage and the popular representation deriving therefrom, 
will be constituted. We could certainly think of the possibility of a 
healthy republican state form, rather as in ancient Rome. Indeed, 
almost all historical memories in Germany point to the monarchical 
state form. Now, with the monarchical state form is in no way 
inseparably bound the dynastic idea. On the contrary, it seems that 
only too often dynastic interests have developed greatly to the harm 
of nations. Another factor admonishes us to extreme caution in the 
question of a possible reintroduction of the monarchic state form - the 
consequence of heritability among dynasties. In the painful history of 
the German people one may find repeatedly that the third generation 
after a significant ruler has squandered the heritage of its forefathers, 
damaged the honour and worthiness of the nation, lost the position 
of power of the empire, and destroyed the peace and welfare of the 
citizens. What the German imagines when he speaks of the advantages 
of the monarchy especially under a hereditary ruling house is always 
the thought of those to whom history has given the epithet "the Great". 
We think thereby of Charles the Great, Otto the Great, 40 Frederick 
the Great 41 and the few who are ranked on a par with these real rulers; 
but just a fleeting memory of the gallery of incapacity, indolence, 
selfishness, prodigality, fantasy, distance from the people, and other 
dangerous characteristics that are bound with the names of Louis the 
Pious 42 Otto III 43 Wenceslaus, 44 Charles VI, 45 Friedrich Wilhelm 

40. [Charlemagne (ca. 742-8 14) became King of the Franks in 768 and extended his rule beyond 
Francia into a Carolingian empire that included most of western Europe.] 

41 . [Otto the Great (912-973) was the Duke of Saxony who became king of the Germans in 936, 
defeated the Magyars in 955 and conquered the kingdom of Italy in 961 . In 962 he was crowned 
emperor by Pope John XII and reigned from Rome as the Holy Roman Emperor.] 

42. [Louis le Pieux (778-840) was the son of Charlemagne, with whom he ruled as co-emperor 
from 8 1 3. In 8 1 7 he divided his empire among his three sons and his nephew Bernard, who ruled 
as King of Italy. However, Bernard rebelled against his uncle and was punished with a sentence 
of blinding, soon after which he died. Louis atoned for his cruelty publicly and thereby lost much 
of his prestige as a ruler. The Frankish empire was marked by civil wars during the remainder 
of his reign.] 

43. [Otto III (980-1002) was the Holy Roman Empire from 996 and faced much opposition 
during his reign from the Slavic peoples so that he was forced to abandon the imperial territories 
east of the Elbe, though he nevertheless succeeded in consolidating the influence of Christianity 
in Poland and Hungary.] 


Gottfried Feder 

III, 46 Wilhelm II 47 suffices to recognise clearly that the dynastic state 
form in no way includes a guarantee of the welfare of the nation. 

That which expresses the inclination of the German to monarchy is 
the need of the German for a leader, and the readiness to subordinate 
himself to a leader. Precisely this last characteristic is perhaps an 
especially typical characteristic of the German, we know only too well 
this trait of the German character in its good and bad aspects. The 
loyalty unto death allowed him fight for and win the most powerful 
victories, it allowed him to follow even foreign flags; but it includes 
also very much lack of independence among the weaker types to the 
point of worthlessness and slavishness, love of things foreign and lack 
of judgement. 

The question regarding the succession is therefore, in Germany 
itself, not hard to solve. The much harder question lies in the problem 
of the leader. 

The selection of the leader has up to now been more or less always 
left to pure chance. The princely marital bed is indeed in no way a 
guarantee of the intellectual capacity and of the necessary character 
traits that are by all means to be demanded of a monarch. And if we 
remember the modern German economy, where mere membership in 
the party decides on the qualification for the highest official posts, we 
must give this question special attention. 

44. [Vaclav I (ca.907-935) of the Pfemyslid dynasty was Duke of Bohemia from 921. In 929, 
Bohemia was attacked by the east Frankish king, Henry the Fowler and forced to resume 
payment of tribute to the latter. Vaclav was murdered by a group of nobles in league with his 
brother Boleslav, who became the next Duke of Bohemia.] 

45. [Charles VI (1368-1422) was called 'le bien-aime '(the Beloved) as well as 'le fou' (the 
Mad). He suffered from bouts of madness and his reign was marked by the continuing conflicts 
of the so-called Hundred Years' War. Charles' ongoing feud with Burgundy was taken advantage 
of by Henry V of England, who defeated the French at the Battle of Agincourt in 1415. By the 
Treaty of Troyes signed in 1420, Henry was given Charles VI's daughter Catherine in marriage 
as well as the succession to the throne of France.] 

46. [Friedrich Wilhelm III (1770-1840) was King of Prussia from 1797. Although he tried to 
pursue a policy of neutrality in the Napoleonic wars and did not join the Third Coalition, he was 
forced by the pro-war party which his queen Luise supported to join the Fourth Coalition of 1806 
which led to the Battle of Jena in which Prussia was defeated by Napoleon.] 

47. [Wilhelm II (1859-1941) was the last German emperor and reigned from 1888 to November 
1918. Wilhelm did not support Bismarck's strict anti-Socialist laws and dismissed the chancellor 
in 1 890. When Austria was forced to attack Serbia after the assassination of Archduke Franz 
Ferdinand in Sarajevo, he decided to support Austria-Hungary even though he was aware of the 
dangers of a war that might involve Russia, France and England.] 


The German State 

The difficulty lies, in any case, in the safeguarding of the moral and 
character qualities of the one in whose hands the destiny of the people 
should be laid. While however a dictator takes the leadership upon 
himself from himself , as the bearer of the national longing, a future 
leader must emerge actually from the conscious will of the nation as the 
best and most suited. Thereby it may remain completely open whether 
the highest worth should be united in one person or whether the state 
leadership should be constituted of two or more. In any case, one thing 
stands firm for us, that the one entrusted with the leadership of the 
highest state affairs, whether it be crowned heads or a consular duum- 
or triumvirate, the highest responsibility will, in the best possible case, 
be anchored in the constitution. Highest responsibility will therefore 
be the most essential national political foundation that will distinguish 
the National Socialist state from the previous forms of rule. 

A special aspect of the national political foundations of the 
National Socialist state is the demand for a nationalist state in which 
the members of foreign countries and races are excluded from the 
leadership of the state affairs as well as from the assumption of public 

The great lesson of the whole of German history can be summarised 
in the fact that Germany was always poor, weak and miserable when 
its rulers pursued foreign interests and when the narrow small concerns 
of the individual provinces and cities were placed above the common 
affairs of the Reich; and likewise was Germany always strong and 
powerful when it was united and its rulers thought and felt in a 
German way and the provinces and cities felt as members of the great 
common fatherland. Closing of the nation externally with all freedom 
and diversity internally. This is the correct idea of a German state. The 
Bismarck Reich already came very close to this ideal of the idea of the 
German state, only that our racial brothers in German Austria 48 still 
remained outside the Reich. 

The unification of all German tribes in a closed national state is 

48. [The Republic of German Austria was the name given to the state formed in 1918 after the 
first World War from the German-speaking lands of the Austro-IIungarian Empire. It included, 
apart from the current Austrian territories. South Tyrol and Tarvisio (now in Italy), southern 
Carinthia and southern Styria (now in Slovenia) and the Sudetenland and German Bohemia (now 
in the Czech Republic).] 


Gottfried Fedev 

therefore our most distinguished national political goal. Internal 
politically the federative and federal character of the larger provinces as 
it was produced historically is to be maintained or rebuilt. The national 
political base lines in this respect are the following: All functions of 
the Reich in which it is a question of the power political position of 
the German Reich with regard to foreign countries are matters of the 
Reich. These are the Foreign Office, embassies and consulates, the 
passport system, the control of foreign trade, the customs system 
and, above all, the army and navy. Internal politically, on the other 
hand, the idea of the most far-reaching independence of the individual 
provinces or federal states is to be fostered. Financial independence is 
the precondition for the independent existence of the nation, so the tax 
legislation will have to be delegated mainly to the provinces. 

The legislation for the civil-, trade-, and penal law will be regulated 
by the law of the Reich, but subordinated in practice to the provincial 
justice and police authorities. 

In a similar way the transport institutions will certainly be regulated 
according to directives of the law of the Reich but they will nevertheless 
remain, in their finances and administratively and operationally, under 
the provincial sovereignty. 

That the freedom of religion should remain fully upheld by the 
constitution requires no special mention; on the other hand, religions 
whose writings are not written fully in the German language and 
accessible to everybody and whose content contain doctrines dangerous 
to the state will not enjoy this protection. 

The constitutional form of the basic socialist character of the Reich 
is stressed especially in the field of labour law as well as in the fields of 
illness-, accident-, old age- and disability insurance and will be better 
implemented than happens today. 


The German State 

Insights and goal-setting 

If every thorough treatment of matters related to time demands an 
answer to the three questions: How is it now? How did it come about? 
and What now? - for without this basic investigation a complete and 
conscientious work is never to be expected - this is valid in a higher 
sense when it is a matter of building a new state. A description of 
the present-day situation within the scope of this work naturally 
has a place only insofar as it is a question of extracting the essential 
characteristics of the present-day critical conditions of the state 
and economy. In such a task one must especially avoid taking any 
symptoms as causes. This is precisely the art of every diagnosis that 
is not deceived by externalities or excrescences but looks deeper into 
the reason of things. This becomes most clear in the medical example 
or in the case of a living man. If a swelling appears somewhere in the 
body the cause is to be sought first in the ailment of the concerned part 
of the body; the fact that this part of the body is diseased has its cause 
in a bad condition of the blood; but even this knowledge is not to be 
considered as the last cause but the bad condition of the blood will 
in turn be the consequence of bad or insufficient nourishment. Now, 
the cure would not be able to succeed if the doctor combated only the 
external phenomenon; thereby a temporary alleviation would in the 
best case set in, a soothing of the pains, but the illness would continue. 
Even an attempt at a cure through a blood-purifying treatment would 
not be able to bring a lasting cure if the basic cause, namely the 
deficient or bad nourishment or the other harmful circumstances, 
were not removed. Only such a treatment from within outwards can 
bring a real cure. This is clear to everybody. Precisely so must the 
investigation be undertaken if we have to do with a sick national body. 
Even here it is very little useful if the external symptoms of the illness 
are combated. One feels only too well as a sad truth the well-known 
saying: "The small rogues are hanged, the big ones are allowed to 
go free". The frequency of violations against the common interest is 
only the external sign of the fact that behind the scenes things are 


Gottfried Feder 

played out that harm the common welfare to a great degree. For, only 
if something is rotten in the state can such great damages persist and 
become a lasting danger for the existence of the state itself. If thus the 
state itself is sick, it is to be supposed with the greatest probability that 
the cause thereof is wrong intellectual attitudes with regard to popular 
concerns and with regard to the actual functions and authority of the 
state itself. A cure can therefore be expected, in the final analysis, 
from a new healthy idea of the state, through the creation of a healthy 
powerful state leadership which is fully independent and not burdened 
with the sins of the past. Every solution that takes its point of departure 
from a compromise with the existing powers or that seeks to bind 
itself again to the collapsed forms of the earlier state bears the seed 
of its own decay in itself. In this connection one must also be warned 
against binding oneself to historical state forms that were indeed not 
bad in themselves but still very quickly succumbed to a collapse. 

What now are the most striking characteristics of the present-day 

Externally and superficially - as in the case of a fever - high 
temperature or, translated into economic political terms: agitation, 
tenseness on every occasion, unrest and disorder. It is extremely 
significant that every stuffy and lazy person, but also the entire army 
of the actual debtors, have always praised with the loudest voice "rest 
and order" as the cure-all. Rest and order is naturally not a political 
goal in general but only a condition that shows that healthy conditions 
rule within the national body. But if a nation is sick, it is quite natural 
and self-evident that this manifests itself in unrest and disorder. A 
political attitude that preaches and seeks to establish only "rest and 
order" is therefore fully wrongly oriented; on the other hand, it only 
helps the illness to enter ever deeper, until death enters with the 
most frightful cramps. Even ulcers and suppurations, thought of as 
personified, naturally wish likewise that the sick person would remain 
pretty quiet for the bacilli can then multiply so wonderfully quickly 
and spread over the entire body and fully putrefy it also internally. No, 
quite on the contrary: away with the suppurations! These must be cut 
out, one cannot adduce the pains of the operative attack as a counter- 
reason; the patient must be brought out of his bad environment, and 


The German State 

above all he must receive a healthy and strong diet. 

The further symptoms are the filling of state positions with 
unsuitable elements, the disposal of state matters through majority 
decisions, the occurrence of such majority decisions in the parliament 
as do not bear any responsibility, the election of such parliaments 
according to a suffrage which externally is indeed the most free 
and universal but internally speculates on the lack of judgement of 
the masses and simply suppresses better insight and higher feeling 
of responsibility. A government that is dependent on parliamentary 
majorities - which come about purely by chance and for which only 
the party political considerations are decisive - can naturally for its 
part no longer be the objective guardian of the common welfare but 
it is the stamping ground for ambitious party politicians and obstinate 
doctrinaires. All these symptoms may be summed up in the word 

This parliamentarianism is the great democratic lie of the capacity 
of the people for self-government. Of course we may think that 
responsibility-conscious state citizens are completely capable of 
judging in an authoritative way on public matters and of leading the 
fate of their community or country, but a suffrage like the universal 
one, direct and secret for persons above 21 years of both sexes, 
bears in itself necessarily the seed of the vile rule of the inferior and 

Along with the vile rule of the parliaments and the governments 
depending thereupon, there rules today in reality, in spite of all the anti- 
capitalistic slogans of the Marxists, large loan capital. High finance is 
the unrestricted ruler of the state and economy. No government dares to 
take any drastic measures against the profit interests of the banking and 
stock-exchange world. All the nations have become bound in interest 
and toll to this supra-national world power through quite gigantic 
national debts. The results of this interest slavery are enormous, they 
shake the entire world to its foundations in economic and national 
political relations. Interest collection has indeed become the major 
work of the governments. This means for the nations a frightful tax 
exploitation and draining through the diverse methods of direct and, 
especially, indirect taxes, through an unstoppably progressive inflation 


Gottfried Feder 

which has led at its peak to a robbing of the entire middle-class of 
their savings. This unrestricted rule of the money-bag exercises, 
behind the mask of the legal claim to interest, the most brutal rule 
that has ever governed the world. It leads to an impoverishment and 
pauperisation of the masses and especially of those circles to whom 
the acquisition of money is not a goal in itself and therefore not the 
central point of their entire thought. Only from this arises the most 
frightful consequence of this absolute financial rule, that is, the moral 
degradation of the peoples standing under this rule. All instincts are 
directed to acquisition and possession, all concepts of loyalty and faith 
sink in the ruthless pursuit of gain, the respectable man is forced to 
experience that, as reward for his respectability, he must sink ever 
deeper down while unscrupulousness brings gigantic profits in the case 
of all possible and impossible businesses. Desperately large circles 
struggle for their livelihood, a bearable income through work alone 
becomes increasingly more difficult. 

In closed frontlines the workers seek to extort ever higher wages, 
strikes shake the economic work places, lame their production and 
indirectly harm therewith most of all those who are dependent on 
the greatest possible production of goods for the national economy, 
precisely the workers themselves. 

As a total phenomenon we can summarise these conditions under 
the concept of"Mammomsm". 

The reverse side of this Mammonism is the Marxist world-view 
born of the intellectual mood of the victims of the Mammonistic 
violation. We know very well that the masterminds of the Marxists 
have cleverly been able to use this intellectual mood for themselves as 
handlers for international capital and, at the same time, to divert from 
themselves the hatred of the exploited, but we have to deal here with 
an intellectual disposition that stands not only in an obstructive but 
in a most highly hostile way against the re-establishment of a healthy 
national state. 

The essence of Marxism we must glimpse in the fact that it denies 
private property and therewith cuts the ground from every economy 
and, beyond that, every higher culture; further, in the fact that it has 
fostered the idea of class-struggle and therewith torn the people apart 


The German State 

into different classes mutually fighting one another. It is enough to 
point to the nameless misery of the Russian people, where, in the 
Soviet state, this erroneous nation- and economy-killing doctrine was 
translated into reality in the highest measure. 

And if we now look for the actual pathogens of the disease, we 
strangely come up everywhere against Jews as leaders and chief 

The Jewish question is becoming a world-question on whose 
solution the welfare and woe of the nations will be dependent. 

To this question a special work will be devoted in this Library 
series. 49 

A review of history shows us that the desperate nations have over 
and over again sought to liberate themselves from this evil through 
bloody suppression and eradication of individual Jews - but after some 
generations the Jews have returned once again stronger and financially 
more powerful after such pogroms. 

We must therefore avoid looking for the solution of the Jewish 
question in this primitive manner - indeed one cannot kill the plague 
bacillus individually, one can only eradicate it by cutting off its life 
necessities from it. 

The anti-Semitism flaring up in the whole world is the torch-signal 
that the nations have recognised their greatest and most deadly enemy, 
but it is now our task to direct this correct emotive knowledge in a 
correct, reasonable way. 

The battle against Marxism and therewith against the Jews succeeds 
through untiring education of the poisoned masses. It is the first stage 
of our battle. 

The breaking of the interest slavery is the last and hardest battle in 
the economic field for the liberation of the people and state from the 
golden network of the supra-national financial power. 

Only after fighting through these stages, and when the victory has 
been fully wrested and secured, would it be time to carry out all the 
further reforms that will give the debilitated and sick national body a 
new will to live and new vital force that will first realise what is in all 

49. [Feder's work on the Jews, Die Juden, was published in 1933 as vol.45 of the 
Nationalsozialistische Bibliothek] 


Gottfried Feder 

our minds, in which we all believe with glowing hearts and which we 
strive for with unbending will: 

Germany's rebirth. 
A new, free, united Greater Germany in a healthy, firm and 
powerful state of work and performance. 


The German State 

II. The Programme 
The origin of the programme 

Every work requires a plan, every realisation must be preceded 
by intellectual creation. The more clearly and better worked out the 
construction plans are the more beautifully and quickly the building will 
be erected. Even new political structures requires a clear construction 
plan, this is called here a political programme. 

The demands that must be placed on a political programme are 
very high and very diverse. It is a question of a task of the highest 
responsibility, for the welfare and woe of one's own people depends 
on whether the plan was good. A programme must further deal, with 
the most concise brevity, with all the important fields of public life, 
must withstand every criticism, may not lose itself in details, may not 
offer the opponents any unnecessary weak points, may not awaken any 
Utopian hopes that cannot later be satisfied. The programme must be a 
faithful image of the coming state and the new economy. It must show 
everybody in outlines the sketch of the state- and economic order that 
is desired, but it may not also constrain or anticipate the execution in 
its details. 

Every programme also has a history and a development, but it is 
certainly a touchstone of the fundamental correctness of a movement 
if, after so many years, nothing essential must be changed in its basic 
features and only some obscurities must be removed. Only the most 
important and striking programme point of the old programme of 
24 February 1923, no. 11, "Abolition of income without work and 
effort, breaking of the interest slavery" urgently requires a thorough 
programmatic treatment in national-, financial- and economic political 
terms. The detailed treatment of this point was at that time not such 
an absolute necessity because, at that time, the more detailed writings 
related to this, Manifesto for the breaking of the interest slavery and 
The state bankruptcy, its solution, were almost the only existing 
writings and were fully known and familiar to the founders and first 


Gottfried Feder 

followers of the movement. In a way it was the intellectual content of 
these writings that added the socialist scope of activity - with plans 
that had already at that time been determined in their fundamental 
features - to the will to renewal that had brought together a small circle 
around Anton Drexler 50 and Adolf Hitler, to the circle of nationalist 
and populist ideas. 

It is precisely these programme points and demands through which 
the German freedom movement of National Socialism essentially 
and fundamentally differentiates itself from all other populist and 
nationalist groups, movements and parties, and through which it 
differentiates itself especially from all so-called parliamentary parties 
which are, for their part, only a manifestation of the Mammonistic- 
plutocratic rule. 

A further necessity in the new formulation of the programme was 
to obtain a clearer form and a clear structuring regarding the individual 
fields of public life. This has happened. 

It is my duty here to think of yet another ground-breaking work 
which owes its origin to a parallel manifestation of National Socialism 
in Austria and Bohemia, I mean the book of the engineer Jung- 
Troppau 5 1 , representative for the Sudeten Germans in Czechoslovakia 
in the Prague Parliament. 

Austrian National Socialism in its beginnings goes far back to the 
time before the war. Its scope of ideas rested more on the attempt to 
bring the socialist world of ideas into harmony with the nationalist 
idea, whereas the German National Socialism of the Reich that arose 
only after the collapse - indeed without knowledge of the existence of 
this Austrian National Socialism - adopted from the start a fundamental 
battle stance against Marxism. 

Today the two movements have come together in their common 

50. [Anton Drexler (1884-1942) was, along with Dietrich Eckart and Feder, one of the founders 
of the German counterpart of the originally Austrian Deutsche Arbeiter Partei in Munich. Drexler 
served as honorary president of the party, of which Hitler had already in 1921 become the clear 
leader. Drexler left the party in 1923 and rejoined when Hitler rose to power in 1933.] 

51. [See above p. iv.] 


The German State 

The national- and economic programme of 
the National Socialist German Workers' Party 

Our goal is - Germany's rebirth in a German spirit to a German 
freedom. 52 

The way to this main goal is: 

I. The national political principle: The German Reich is the home of 
the Germans. 

a) in foreign policy: 

1. The establishment of a closed national state that includes all 

2. The powerful representation of German interests abroad. 

b) in racial policy: 

3. The removal of the Jews and all non-Germans from all responsible 
positions in public life. 

4. Prohibition of immigration of eastern Jews and other parasitical 
foreigners. Troublesome foreigners and Jews may be deported. 

c) in civic policy: 

5. Only the German who pledges himself to the German culture and 
community can exercise state citizenship rights. 

6. One who is not a German can live only as a guest in the German 
state and stands under foreign law. 

7. The rights and interests of the Germans go before those of the 
members of foreign nations. 

II. The economic political principle: The task of the national economy 
is the fulfilment of demand and not as high a profitability as possible 

52. [For a detailed discussion of these points see Feder's Das Programm der NSDAP und seine 
weltanschaulichen Grundlagen, Munich, 1927; tr. E.T.S. Dugdale, The Programme of the 
NSDAP and its general conceptions, Munich, 1932]. 


Gottfried Feder 

for loan capital. 

8. National Socialism fundamentally recognises private property and 
places it under state protection. 

9. The welfare of the people however draws a limit to the immoderate 
hoarding of wealth in the hands of individuals. 

10. All Germans form a work community for the promotion of the 
common welfare and culture. 

1 1 . Within the scope of this general work obligation of every German 
and with fundamental acknowledgement of private property is allowed 
to every German a free possibility of acquisition and free disposal of 
his work income. 

12. The healthy combination of small-, medium- and big businesses 
in all fields of the economic life, thus also in agriculture, remains 

13. Gigantic enterprises (corporations, syndicates and trusts) will be 

14. Usury and racketeering, as well as ruthless enrichment at the cost 
and harm of the people, will be punished with death. 

15. The introduction of a year of compulsory work for every 

III. The financial political principle: The financial system stands in the 
service of the state, the financial powers may not form a state within 
the state; thus our goal: Breaking of the interest slavery through: 

16. Liberation of the state and therewith the people from its interest- 
bound debt to large loan capital. 

17. Nationalisation of the Reichsbank Pub.Ltd.Co., and the central 

18. The financing of all large public tasks (development of hydro- 
energy, roadways, etc.) with avoidance of loans through the issuance of 
interest-free state treasury vouchers or through a cash-free method. 

19. The introduction of a stable currency on a covered basis. 

20. The creation of a non-profit Construction and Economic Bank 
(currency reform) for the granting of interest-free credit. 

21. Thorough restructuring of the tax system according to socialist, 
national economic principles. Liberation of consumption from the 


The German State 

burden of indirect taxes and production from constricting taxes (tax 
reform and tax exemption). 

IV. The social political principle: The common welfare is the highest 

22. Generous development of old age insurance through nationalisation 
of the life-annuity system. To every needy German national comrade 
an adequate pension will be guaranteed from a certain age or in the case 
of a premature occurrence of permanent inability to earn a living. 

23. The sharing of all people engaged in productive enterprises 
according to performance and age in the revenues of the work with 
an accompanying share in the responsibility for the fulfilment of the 
national economic tasks of the work. 

24. The confiscation of all war- and revolution-profits not based on 
honest work as well as of property acquired through hoarding and 
usury and their use for the development of social insurance. 

25. Removal of the housing shortage through comprehensive new 
housing buildings throughout the Reich by means of the new non- 
profit Construction and Economic Bank to be created according to 

V. In cultural-policy: A blossoming of all the sciences and fine arts on 
the foundation of a politically free, economically healthy state is our 
chief cultural goal. 

This should be reached through 

26. The education of the youth into physically healthy and intellectually 
free men according to the great traditions of German intellectual life. 

27. Full freedom of religion and conscience. 

28. Special protection of the Christian faith. 

29. Suppression and exclusion of religious doctrines that go against 
the German moral feeling and whose content bear a state- and nation- 
destroying character. 

30. Suppression of all harmful influences in literature and the press, 
stage, art and cinema. 

3 1 . Freedom of instruction in the German universities, formation of a 
ruling class of men of character. 


Gottfried Feder 

VI. Militarily: 

32. Making the nation defensible through the introduction of military 
law for every free German. 

33. Abolition of mercenary troops. 

34. The creation of a militia army for the defence of the homeland 
under a professional officer corps to be built up through a strict 
hierarchical discipline. 

VII. Other reforms: 

35. Reform of the press system. Suppression of all press instruments 
that contravene the concerns of the German people. The strictest 
responsibility for all news that is falsely or tendentiously distorted. 

36. Reform of the suffrage with the abolition of the current corrupting 
forms of election campaign and the lack of responsibility of the elected 

37. Development of professional chambers. 

38. Reform of the judiciary in the field of 

Land law - (fundamental recognition of the right to property in 
land, non-leasability of land on the part of private capital, preemption 
right of the state, and reversion of land to the state in case of careless 

Civil law - (far stricter protection of personal honour and of health, 
as against the one-sided legal protection of property ruling today). 

39. Constitutional reforms: 

Constitution. The constitution corresponding to the German 
character is a sovereign state leadership focussed in a highest position. 
- Whether this highest position is occupied by a monarch to be elected 
by the people or by two or three responsible highest Reich officials 
must be left for later determination by the people. 

Federal character of the Reich. The composition of the German 
people from different provinces internally bound through tribes and 
history conditions the comprehensive independence of the individual 
federal states with respect to their internal affairs. 

The concern of the Reich is the representation of the German people 


The German State 

externally, passports and tolls, and, further, the army and navy. 

Three principal opponents stand in the way of the accomplishment 
of this national- and economic programme of National Socialism. 
Marxism, parliamentarianism and, ranged above both, large loan 

1 . Our anti-Marxist battle is directed against the state-disintegrating 
doctrine of the Jew Karl Marx, against the people-disintegrating 
doctrine of class-struggle, against the economy-disintegrating doctrine 
of the denial of private property and against the purely economic 
materialistic conception of history. 

2. Our anti-parliamentarian battle is directed against the 
irresponsibility of the so-called popular representatives who - immune 
- never actually have to take responsibility for the consequences of 
their decisions, as well as against all damages produced therefrom 
(corruption, nepotism, bribability) and, as the worst consequence - a 
government dependent on such a parliament. 

3. Our anti-Mammonistic battle, which is ranged above the other 
two battle-fronts, is directed against the world-encompassing financial 
power, that is, against the permanent financial and economic bleeding 
and exploitation of our people through large loan capital. 

This battle however is, on the other hand, also a powerful intellectual 
struggle against the soul-destroying materialistic spirit of egoism and 
avarice with all its concomitant corrupting manifestations in all fields 
of our public, economic and cultural life. 

In the last and deepest analysis, it is a matter of the battle of two 
world-views that are expressed through two fundamentally different 
intellectual structures - the productive and creative spirit and the 
mobile avaricious spirit. The creative spirit rooted in the soil and 
yet again overcoming the world in metaphysical experience finds 
its principal representatives in Aryan man - the avaricious, rootless 
commercial and materialistic spirit directed purely to the this-worldly 
finds its principal representative in the Jew. 

National Socialism like Anti-Semitism glimpses in the Jewish- 
materialistic spirit the primary root of the evil, but it also knows that 
this most powerful battle of world-history cannot remain standing in 
purely negative anti-Semitic demands, therefore the entire national- 


Gottfried Feder 

and economic programme of National Socialism rises far above 
the certainly ground-breaking but negative anti-Semitic battle by 
positively giving a creative constructive image of how the National 
Socialist state of work and performance should look. 

If this main goal is reached, then the National Socialist Party will be 
dissolved. National Socialism will then have become the life-content 
of the entire German people. The National Socialist German Workers' 
Party is indeed in general not a parliamentary party in the customary 
sense of the word, but only the determined, forward-looking and 
future-oriented section of the population that has gathered together 
around a leader strong in will and mind, in order to lead Germany 
out of shame and powerlessness externally, out of destruction and 
corruption internally, to a powerful and imposing position externally, 
and, internally, to an economically sound, culturally blooming, 
intellectually and morally high-standing national community. 

We wish to build the Reich of German longing as Geibel 53 sings 


One externally, with a mighty sword, 
Rallying round a high banner, 
Internally rich and manifold, 
Every tribe in its own way! 

53. [Emanuel Geibel (1815-1884) was a German poet and dramatist who wrote several patriotic 
poems that were attacked by the contemporary liberal 'Young German' literary circle around 
the Jewish writers, Heinrich Heine and Ludwig Borne, but later championed by the National 


The German State 

III. The state-structure of the National Socialist state 

The National Socialist idea of the German state 

Already in the chapter on the power political foundations we have 
pointed to the fact that every deviation of the German rulers from 
their purely German tasks was accompanied by the most baneful 
consequences for the German people. If one surveys German history 
one always finds the German longing for a closed national state realised 
only in short historical periods, over and over again this German 
dream faded away, and over and over again Germany sank back in 
powerlessness and disintegration. Thereby there stands firm from the 
entire German history one lesson that only the closing of the nation 
within a powerfully led state enables Germany to resist the enormous 
dangers which arise to it merely from its unfavourable geopolitical 
situation. Almost nowhere does Germany have natural boundaries, 
almost everywhere it lies free and unprotected against hostile inroads. 
Neither the sea that girdles England nor the high mountains which 
separate Spain and Italy from its neighbours give Germany a natural 
defence. France has only one open side against us, Russia the same. 
Only Germany lies in the middle between the other nations - as 
the heart - and as the battlefield of Europe. On German soil battled 
Spanish, French, English, Swedish, Russian and Mongol armies, on 
German soil were the frightful religious wars of the Thirty Years' War 
fought, and conversely Germans bled in foreign service for foreign 
interests in all the lands. Mother Germania bled from thousands of 
wounds that were struck by its foreign armies and - that were struck 
in her by the strife of her own sons. Endlessly tragic is German 
history, so tragic that the German longing for a unified, closed German 
Reich was included in fairy-tales, in the sagas of old Barbarossa in 
the Kyffhauser. 54 Through centuries the realisation of the German 
state idea remained - a longing and hope of the best people of the 
nation until, in 1871, a mighty smith forged the Germany unity. Much 

54. [The Kyfifhteer range of hills between the states of Thuringia and Saxony-Anhalt is 
considered to be the resting place of the Holy Roman Emperor, Friedrich Barbarossa (1122- 
1 190), who drowned in the Saleph river in Turkey during the Third Crusade.] 


Gottfried Feder 

remained to be desired in the realisation of the Great German state that 
was to include all Germans who live in territorial connection with the 
motherland. But already this partial realisation of the German longing 
granted us a high flowering of German history as seldom before. 

But we do not have to reckon with 'ifs' and 'buts', rather, we have 
to learn from history. Politics is history that is becoming, and if from 
the "making of history" salvation should bloom for our people then 
our statecraft, our national politics must, with respect for that which 
has come about in history, avoid the mistakes of earlier times and 
bind themselves to the best tradition. The man, the politician without 
a history who dogmatically makes history from his armchair, will be 
able to bring only calamity on a people as we have experienced it in 
the last years from the new German Marxist government-showmen. 
As disastrous and pernicious is the complete breakdown of the 
old social form, especially when this destruction is identical to the 
force of the Marxist movement, so little may the old be preserved 
merely because it is old. Herein lies once again the tragedy of the 
conservative spirit, that, creatively unfruitful and without imagination, 
it rejects everything new just because it is new, and because it holds 
fast tenaciously to outdated forms which have lost their substance a 
long time ago. People and state are not mummies and constructions, 
but living entities; the clothes cut once do not suit forever. Only some 
quite large basic traits are drawn through the destiny of nations, and 
a neglect of such basic knowledge has always avenged itself bitterly 
on the nations. For us Germans the fundamental historical national 
political doctrine is: "Be unified!" 

The word "united" 55 however does not mean "unity" 56 but "being 
in agreement" 57 . Only from the agreement of the German tribes on 
the principles of external and internal politics can there grow as its 
finest flower an internally free state that is externally powerful with 
international weight. 

For the German state therefore there may not be any European 
or international economic, church or humanitarian motives but only 
exclusively the welfare of the entire German nation. I mean "motives" 

55. ["einig"] 

56. ["Einheit"] 

57. ["Einigkeit"] 


The German State 

for political action. Alongside there run naturally the influences of 
a church-, economic- and generally human character which must 
be adequately valued and considered. But the principle must be and 
remain that the German national state has to represent only Germans 
and this in internal politics as well as in external. 
Our national political goal therefore is: 

1. The establishment of a closed national state which includes all 

2. The powerful representation of all German interests abroad. 


Gottfried Feder 

The nationalist idea 

The precondition for the awakening or, better, for the reawakening 
of a strong national consciousness is 

the removal of all Jews and non-Germans from all responsible 
positions in public life. 

The determined defensive battle against the invasion of the Jews 
in almost all fields of our public life is carried out with total energy 
only by National Socialism. The battle against Jewry is the conscious 
struggle for the German spirit and for German freedom. 

The influence and effect of the Jews on their host peoples cannot 
at all be compared with the power relations and the battles of other 
peoples but only with the struggle for life and death between a healthy 
body and the deadly poisonous germs that have attacked it. When a 
living organism is attacked by poisonous bacilli the question is only: 
either the healthy force of the body will become master of the foreign 
intruders - then it cuts them out - or it will no longer be master of 
them, then it will die on account of them. So also for the host peoples 
of the Jews everywhere in the world there is only this: either cut the 
Jews out of the national body - or die on account of the Jew. 

Precisely the comparison with the human body and the germs shows 
us very graphically how lopsided the favourite misleading opinion is, 
that the Jews worked their way up everywhere only on account of 
their greater efficiency and it is highly wrong and unjust to attack and 
persecute them for that reason. One cannot simply say that the cholera 
bacillus is likewise so much stronger and efficient than the man and 
that is why it has overcome the healthy man - no, it is a poison for 
the man. And, precisely as in this battle of the living organism against 
invading poisons, special symptoms of poisoning appear accompanied 
by fever conditions, cramps, symptoms of paralysis, etc., so the 
battle of the nations attacked by the Jew is expressed in quite similar 
symptoms of disease - unrest and agitation in the civic and political 
life, powerful convulsions in the national body, turmoil, terror, civil 
war alternating with quite typical paralysis symptoms especially in the 
intellectual parts of the nations - in the governments. Then there is only 


The German State 

one question, whether the nationally conscious circles recognising the 
enemy succeed in warning and enlightening the governments or in 
forming the government and neutralising the Jews themselves - then 
the cure enters with certainty; if it does not succeed in doing this, 
then national death enters equally certainly. There is no third way. A 
temporary isolation - to remain with the medical imagery - brings 
about only apparent remedies: sooner or later the bacilli break out 
anew into the blood vessels of the body, the end of this second struggle 
is then deadly for the patient. 

Decisive for the final success - as in life in general - is the will to 
power. Without this will to power - without this will to the maintenance 
of the nation the nation is helplessly delivered to a downfall. What 
does not literally go down becomes a slave, fellaheen, bondman and 
servant of the all- Jewish world-power. 

It is a life and death battle. Many efficient soldiers have set out - 
but the majority of our national comrades are still asleep. Education 
over and over again, tireless, is the solution. What makes this education 
so especially difficult is the artlessness and softness of the Aryan 
precisely in these vital racial questions. 

The strong racial mixture within our German people itself 
has doubtless almost completely buried the clear and high racial 
consciousness in too many so that only an indefinite feeling of 
aversion against the racially foreign Jews has remained instead of a a 
precise knowledge of racial laws. The Jew for his part has most strictly 
followed his racial laws for more than two thousand years in the clear 
knowledge of the outstanding importance of the maintenance of the 
purity of the blood for character and nation. 58 

On the other hand, he has been able to represent the racial 
agitation as outdated rubbish, which, with regard to the racial mixture 
in Germany, was unfortunately possible for him with a certain 
appearance of justification. Instead of the the Jewish contempt for 
racial science on the part of the Germans being opposed with complete 
determination, by the demand: "German, keep your blood pure!", the 
German was inferior even in this field to the psychagogic arts 59 of the 

58. Cf. the National Socialist Library volumes on race and the Jews! 

59. [arts of persuasion] 


Gottfried Feder 

Jew. The century of the Enlightenment with its humanitarian ideals 
indeed brought to the Jews emancipation from the chains which had 
been forged by our forefathers in their higher wisdom against the 
infestation of the Jewish spirit of robbery and usury, but to ourselves 
only confusion and uncertainty on this fundamental question. With the 
sentence: "the Jews are also men" - a sentence which was and is indeed 
never disputed by anybody - the entry of the Jews to civic equal rights 
was granted. The national-racial resistance against the Jewish foreign 
folk of an entirely different intellectual structure was therewith lulled 
and the battle against the civic emancipation was therewith crippled 
from the start. 

From this platform now there took place the conquest of our entire 
economic and, recently, public life up to the present situation of the 
unrestricted rule of the Jews. 

An entire series of testimonies of the Jews themselves reveals that 
they feel as a state within a state, that they feel more closely bound to 
their racial comrades in other countries than to their host peoples. 

From this Jewish feeling of belonging closely together among 
peoples are directly produced dangers for the indigenous peoples in 
the field of the foreign political relations of nations in war and peace. 

At first, however, the attention of the Jews was directed to the 
demand for economic advantages. Here once again their unrestricted 
pursuit of profit, impaired by no social feelings for their host peoples, 
stood them in good stead. 

As the inventors and bearers of the modern credit system it was 
soon an easy matter for them to bring the entire financial economy of 
the states and, through bank and stock-exchange, also of the private 
sector for the most part under their influence. 

From here, thus after the creation of their financial position, 
Jewry stretched its fingers also to the intellectual-cultural products 
of the nation; here their moving spirit, their quick wit, their critical 
understanding - characteristics that may often appear as definite 
advantages to the serious, heavy, down-to-earth Aryan spirit - came to 
their help. 

But in reality it was only the thieving instinct, their lack of 
conscience and unscrupulousness - which is already announced in 


The German State 

their religious doctrines. For the Jew, according to the doctrines of 
the Schulchan Aruch, 60 the property of the non-Jew is like property 
without a master - there so that the Jew may appropriate it! The Jew 
set all the means of the banking and stock-exchange technique at his 
service. Anonymisation -the depersonalisation of our economy through 
the stock-marketable form of the public limited company - has to a 
certain degree separated capital from work, the share-holder knows in 
the rarest instances something of his factory, he has only the one-sided 
interest in the profitability of his money when he has invested it in the 
form of shares. This phenomenon has to be mentioned in this place 
because with this depersonalisation of our economy there goes hand 
in hand also its degradation. The entrepreneur and manufacturer who 
has built up his enterprise from scratch, who knows the requirements 
of his customers, who still has the old business honourableness and 
considers it as his duty to produce a solid, good, lasting product 
corresponding to the actual needs of the economy, this really solid 
entrepreneur is something so fundamentally different from the modern 
large share-holder who, with the purely capitalistic possession of a 
large share package knows only one interest, to aim at as high a return 
as possible. Whether in the enterprises good and cheap objects are 
manufactured, whether in general productive values are created by a 
stock company or, as in the case of the credit companies (banks) in 
general, no values are created is a matter of utmost indifference to the 
capitalist - the share-holder. This has as its further consequence that 
the production is oriented less to the needs, that, much rather, only an 
apparent need needs to be stirred up through enormous advertising. 
Earlier it was entirely forbidden in the code of honour of the 
entrepreneurs to extol one's products; one who did this was a market- 
crier, and such a market-crier-like extolling of one's wares was 
considered by the solid businessman to be dishonest competition. The 
Jewish trader however conducted precisely this sort of market-crying 
trade businesses with total insistence, wherein his arts of persuasion 
came in handy. Today in place of the importunate Jewish crier has 
appeared Jewish advertising. 

60. [The Schulchan Aruch is the most authoritative code of Jewish law and was composed in 
1563 in northern Palestine by Yosef Karo.] 


Gottfried Feder 

In the field of science there occurred a similar development, 
especially in the field of economic science - the so-called national 
economics. Gradually the task of national economics was seen no 
longer to lie in the investigation of the national economic legitimacies 
and necessities and in the derivation of guidelines for the economic 
leadership from the results of the investigations but increasingly only 
a description of the situation was carried out without investigating 
whether the economic phenomena and forms encountered were also 
good and suitable and applicable to the actual needs of the national 
economy. In this way people succeeded, and succeed today more 
than ever, in effecting the frightful damages to the economy and, 
therewith, to the national community - considered scientifically - 
and, for this reason, in an unchangeable manner. Into this field there 
enters especially the doctrine of the state and private credit services 
industry, and especially the doctrine of interest. We have dealt with 
this question in detail in another place, here it may suffice to point 
to the fact that basically that which we call national economy today 
is only a private capitalistic instruction to personal enrichment and a 
well arranged attempt at the justification of the usurious capitalistic 
robbery of the workforce of productive nations. 

It is worth noting that among the lecturers of national economics 
there is a very large percentage of Jews. 

To the layman more striking is the incursion of the Jews into the 
literary and artistic field. 

One who considers our present-day theatre will be shocked at the 
baseness and cynicism that spreads there. Especially valid is this of the 
modern phenomenon of the cinema. The drama of lechers and rakes 
rules our stages; with subversive and clever dialectic, the good German 
is lectured that morality and ethics, honour and conscientiousness 
are basically sheer stupidity without which one can go farther. These 
attacks on the public are accompanied by the Jewish theatre-agency 
nuisance in which the knowledge of the artistically inclined tends to 
decide less than the gratitude to the theatre- and concert-agents of 
those seeking a position. 

But then there followed on a wide scope the manipulation of 
public opinion through the daily press. Almost all the large newspapers 


The German State 

gradually passed over to Jewish ownership. Therewith the circle around 
the German people was closed. To the economic rule was added the 
intellectual rule. Everything that was detrimental to the Jewish interests 
was withheld and silenced as long as possible from the public; if ideas 
or performances nevertheless asserted themselves, then began the real 
witch-hunt, at first through the attempt to make such efforts ridiculous, 
and, if even that did not help, lies and misrepresentation as well as 
personal denigration had to operate. Briberies, threats were attempted 
and finally one did not shy away even from economically mining the 
inconvenient opponent or admonisher, or from even killing him. 

This last most frightful weapon was generally not used, or only 
seldom, against private persons, for hardly ever did the reaction of a 
real friend of the people without a political or state position of power 
achieve a degree of effectiveness before he was already broken by the 
barrage of lies and calumny in the public organs of the Jews. 

In the parties, the dissatisfaction of the masses was stoked through 
extreme exaggeration, and the class hatred against the propertied 
and their supposed protectors, the state authority and the army, was 
kindled. Even here - as everywhere in the case of these assaults on the 
national state - it was Jews who mostly agitated and fomented. It need 
only be recalled that Karl Marx, the founder of the Marxist doctrine of 
class-struggle, was indeed a Jew (Mardochai was his real name). His 
herald in Germany, Ferdinand Lassalle, 61 originally Feist Lasal, was 
likewise a Jew. 

In the war and revolution then the Jewish work of destruction against 
the German state was completed. The princes were driven away, the 
epaulettes torn from the officers, the officials made compliant through 
hunger so that they may make their manpower - indispensable even 
to the socialist-high-capitalist state of modern Germany - available. 
In this way was the German nation disarmed, emasculated, robbed 
of its leaders, dispossessed and violated, demoralised and debilitated, 
while everywhere throughout public life, in economics and politics, 

61. [Ferdinand Lassalle (1825-1864) was a German-Jewish socialist who was acquainted 
with Marx, though the latter considered him an opportunist on account of his willingness to 
compromise with the conservative Bismarck. Marx therefore did not support Lassalle when the 
latter founded an Allgemeiner Deutscher Arbeiterverein (General German Workers ' Association) 
in 1 863 aimed mainly at obtaining universal direct suffrage.] 


Gottfried Feder 

in art and theatre, the Jews arrogated to themselves an unquestionable 

The foundation of their rule is their enormous wealth. 

In spite of their small number in relation to their host peoples 
they have been able to bring all important posts of public life into the 
hands of their Jewish racial comrades or of Germans closely related 
to Jews. But nevertheless a removal of the Jews from the German 
national body is completely possible - so much more so in that the real 
vitally important productive activity in industry and agriculture, in the 
professions and administration, is almost entirely free of Jews. 

A removal of the Jews from our national body would neither 
disturb the agricultural production - I have not yet seen any Jew 
behind the plough going round the furrow - nor would the factories 
have to come to a standstill through lack of workers - the workforce 
will indeed know that no Jew hoists coal in hard work or stands at the 
forge - our work places of the smith and metalworker, carpenter and 
cobbler, would not be orphaned - the houses would not in any way 
have to remain as ruins after the expulsion of the Jews, the statistics 
do not mention anything of Jewish masons and carpenters, roofers 
or glazers. But even not in trade and commerce would a stagnation 
appear if the Jews were no longer there. In the field of the transport 
system, the state has already up to now taken care of personal and 
goods traffic in an exemplary way and, anyway, who has seen Jews as 
railway conductors or locomotive drivers - or as tram conductors, or 
as waggoners or transport workers? 

But even in the field of the typical predisposition of the Jew to 
trade and finance, the military administrative posts before the war have 
shown that they were able to conduct a careful storage and provision 
service, in trade itself hundreds of thousands of commercial clerks 
and German businessmen are active who understand the real aspects 
and necessities of trade, and in the state bank and the postal bank we 
possess institutions that could form the basis of a healthy national 
economy freed of the Jewish robber economy. 

If we have seen in this rather brief survey that the Jews represent 
in no way an irreplaceable function in our state and national life, that 
they, on the other hand, misuse their supremacy in the most ruthless 


The German State 

way to the harm of their host peoples, then as an obvious and logical 
consequence is produced the demand for the expulsion of the Jews 
from our nation. Only one who pledges himself to the German national 
community can be a state citizen. 62 

From this review of the racial question naturally and necessarily 
follow also the other consequences of the prohibition of the immigration 
of eastern Jews. It is a complete lack of understanding of the Jewish 
question if one believes that it is sufficient to repel the eastern Jews 
through a prohibition of immigration. It is absolutely necessary to 
simultaneously place the Jews hostile to our people settled amongst us 
under an aliens act. The eastern Jews are of course the great reservoir 
from which the Jews constantly replenish themselves. The great danger 
that this immigration includes in itself has been revealed with all clarity 
through the experiences of the last years. In a few years these eastern 
Jews have been able through all possible business tricks and flourishes 
to come into possession of enormous wealth. Our courtrooms are full 
of frauds exercised by such foreign elements. The state does not have 
the least interest in the immigration of such people who in no way 
make themselves useful productively. 

This position of the National Socialist state to the eastern Jews 
does not exclude that even the members of other nations who are 
parasites on the national body can be expelled. 

The discussion of these questions leads us now to the third section 
of the state policy of National Socialism: to the citizenship right. 

62. [This stipulation was already included in the second part of the Nuremberg Laws of September 
15, 1 935, 'The Reich citizenship law', Art.2: "A citizen of the Reich is that subject only who is of 
German or kindred blood and who, through his conduct, shows that he is both desirous and fit to 
serve the German people and Reich faithfully." The complete separation of Jews from German 
society was decreed in the first part of these laws, 'Laws for the protection of German blood and 
German honour'.] 


Gottfried Feder 

The citizenship right 

The citizenship right must be acquired. In this principle National 
Socialism differs considerably from the right valid at present according 
to which every adult German above 20 years, of male and female sex, 
can exercise state citizenship rights. Likewise today, according to the 
Weimar constitution, this possibility is open to the members of the 
Jewish race. Similarly this state membership can be acquired by any 
foreigner with the fulfilment of a few superficial formalities. 

The Weimar constitution does not in general understand the concept 
of state citizen but speaks in Art. 1 10 of membership in a state, and in 
Art. 109 of equal rights before the law for all state members of male 
and female sex. The vagueness of this concept naturally excludes the 
demand of moral and racial preconditions for the acquisition of the 
citizenship right. In contrast to this, Art. 113 of the Reich constitution 
takes the foreign-speaking "sections of the nation" (!) under its special 
protection; they "may not be disadvantaged in their free traditional 
development, especially in the use of their mother-tongue in 
education, as well as in the internal administration and administration 
of justice". 

If one compares with this most comprehensive consideration of 
foreign nationals the practice of our Law for the Protection of the 
Republic against one's own national comrades, the obligation to 
deliver the so-called war-criminals to the enemy, with the certainty 
guaranteed in Art. 1 12 that "no German of a foreign government may 
be delivered to persecution or punishment", and, if once compares 
precisely this last-mentioned article with the infamous judgements of 
the French against Krupp 63 and his directors, perhaps a reference to 
the fact that the author of this constitution was the Jew Preuss 64 

63. [Gustav Krupp von Bohlen und Halbach (1870-1950) ran the Friedrich Krupp AG from 
1909 to 1941. In collaboration with the Reichswehr under Hans von Seeckt ( 1866-1936), Krupp 
undertook the secret rearmament of Germany in violation of the Treaty of Versailles. In 1923, 
when the French and Belgians occupied the Ruhr region, they also fined Krupp for holding a 
large public funeral for the thirteen workers of the Krupp factor) in Essen shot dead by the 
French during the occupation.] 

64. [Hugo PreuB (1860-1925) was the German-Jewish Minister of the Interior of the Weima 
Republic and was instrumental in the formulation of the Weimar Constitution of 1919.] 


The German State 

suffices to set a definite light on all these events. 

Not "the more fortunate future of the Poles", as Betthmann- 
Hollweg 65 said in one of his unfortunate parliamentary speeches, 
and not also the betterment of the Jews in Romania (according to 
Kuhlmann) 66 can be the leading idea of a German state but only the 
welfare of the German people. This guiding theme is expressed in the 
national and economic programme of the NSDAP (The Programme, 
p.35) under No. 7: "The rights and interests of the German precede 
those of the members of foreign nations" and under No. 6: "One who is 
not a German can only live as a guest in Germany and stands under 
the aliens act". 

According to this the state citizenship right must be acquired. It 
can also be lost through unworthiness. It is a right from which the 
Jews are fundamentally excluded, from which also members of other 
nations can be excluded. 

The internal condition for the applicant for German state 
citizenship is the pledge to the German culture and community. One 
who does not pledge himself to the German nation in this way, one who 
declares himself to be an enemy of the German state, one who feels 
more closely bound to members of other nations than with his people, 
cannot receive any German state citizenship rights, for he indeed does 
not wish to have anything to do with the German community. 

It seems to be indeed a madness when people who declare quite 
publicly that they know no fatherland called Germany, as Crispien 67 
and others did, still wish to advise on the fate of this country, when 
they claim as representatives of the people, as delegates to still enjoy 
special privileges and when they still enjoy the protection of especially 
strict laws (the protection of the republic) in case they are promoted 
from this parliament to government positions. 

The National Socialist German state will demand precisely from 

65. [Theodor von Betthmann-Hollweg (1856-1921) served as German Chancellor from 1909 to 
1917. During the war, Betthman-Hollweg seemed to be favouring more moderate policies than 
those advocated by the military leaders.] 

66. [Richard von Kuhlmann (1873-1948) served as Germany's Secretary of State for Foreign 
Affairs from August 1917 to July 1918. In May 1918 he negotiated the Peace of Bucharest with 

67. [Arthur Crispien (1875-1946) was elected as Social Democratic member of parliament in 
1920 and became co-chairman of the Sozialdemokratische Partei (SPD) in 1922.] 


Gottfried Feder 

such men the hardest reckoning and the members of the revolutionary 
governments and parliaments will retrospectively have to take 
responsibility for their actions or omissions. The laws that are to be 
developed on the responsibility of all persons who stand in public life 
will therefore have to be endowed with retrospective powers. 

Here it is not, as in the case of the mistake of the German revolution, 
a matter of the battle for wages of the hungry "proletarians" against 
the sated and insatiable capitalists, thus not about the misleading of 
the healthy and correct feelings of the working people through the idea 
of class-struggle, but here it is a matter of the moral demand that the 
irresponsibility of the present beneficiaries of the present parliamentary 
and government system must come to an end, and that those who have 
enriched themselves in an immoderate way on the need of the people 
or those who have abetted the machinations of other circles will be 
brought to the deserved punishment. 

The slogan: "The little rogues are hanged, the big ones are allowed 
to go free" should not be proved right. The National Socialist state will, 
on the contrary, in the case of the determination of the punishment, 
take into consideration the fact of the small rogues' being seduced as 
a very mitigating one and, on the other hand, bring the big criminals 
against the German people to justice with the total strictness of the 

The purgative work of this state court cannot now in any way 
stop with those who first came to power with the revolution. It will 
also have to target those under the Imperial government who, through 
their negligence, made this German downfall possible. The chief 
responsible - Bethmann-Hollweg - has indeed been taken from his 
earthly judges, the same is true of the next most guilty - Erzberger, 68 
who, as the father of the wretched parliamentary revolution of July 
1917, raised once again the sinking will-to-win of the enemies. Even 

68. [Matthias Erzberger (1875-1921) was a member of the Deutsche Zentrumspartei (Catholic 
Centre Party) who was considered Betthman-Hollweg's right-hand man. During the war, in mid- 
1917, he urged a negotiated end to the war and undermined confidence in the German military. 
Erzberger signed the armistice ending the first World War and, as Finance Minister in the Weimar 
Republic, he endorsed the Treaty of Versailles. He was assassinated in 1921 by ultra-national 
members of the 'Organisation Consul' founded by the Freikorps commander, Hermann Ehrhardt 


The German State 

Eisner 69 and Rathenau have been removed from the scene of their 
nation-destroying activity, to be sure in an illegal way but according 
to the iron laws of history. But many of those still live who, through the 
organisation of the munitions strike in January 1918, thrust a dagger 
into the back of the fighting army, and those still live who through 
speech and writing broke the will to win, those still live who preached 
'peace without winners and losers', those still live and accept it as 
right who misused the distress of the people in war and revolution for 
their own immoderate enrichment. 

Certainly such a national political demand will spread fear and 
horror, and tens of thousands will fear for their lives because they are 
not of pure heart. But for National Socialism with this demand for 
social justice stands and falls the question of destiny for the German 
people, whether the German people can find its way to a noble nation, 
or whether it will eke out a miserable life in degradation and corruption 
as a fellaheen nation. For the National Socialist movement its raison- 
d'etre is also decided by this question. 

The state citizenship right is accordingly not a thing that will be 
placed in the cradle of everybody born in Germany; much rather, this 
state citizenship right includes in itself also the highest moral obligations 
towards the state and nation. The observance of this responsibility to 
the state and nation must however also be protected by the possibility 
that this right may again be lost in case of unworthiness. 

On the other hand, the acquisition of the state citizenship right will 
not be an act of mercy but a claim that every industrious German can 
raise who proves himself worthy of the German community and who 
pledges himself to the German racial and historical community. One 
who has fulfilled his army and work obligation, one who is active as 
an honourable worker in his profession, has a claim to the acquisition 
of the state citizenship right. 

But with this state citizenship right is also bound the obligation 
not to forget in all one's work the view of the larger whole and also 

69. [Kurt Eisner (1867-1919) was a German Jewish socialist who organised the revolution that 
overthrew the Wittelsbach dynasty of Bavaria in November 1918. He became the republican 
prime minister of Bavaria and at the Berne Conference of Socialists he attacked the moderate 
socialists for not acknowledging Germany's guilt in bringing about the first World War. He was 
assassinated by the nationalist Count Arco von Valley in February 1919.] 


Gottfried Feder 

to be always conscious in one's economic activity of the fact that one 
must fit one's work into the whole, that is, even with full freedom in 
particular areas, the activity of the German state citizen should not be 
directed against the welfare of the whole. 


The German State 

National economy 

The task of the national economy is the fulfilment of demand and 
not the attainment of as high an interest-yield for loan capital as 

One would think that this principle is taken for granted for every 
economy, and yet the National Socialist economy is different from 
the current interest capitalistic economy precisely in this guiding 
principle. It is not so easy for the guileless sense of the productive man 
to imagine a national economy that does not serve the fulfilment of 
demand; and yet it must be made clear now that for the current masters 
of the economy - the bank- and stock-exchange capital - the fulfilment 
of demand is basically of very little importance. International capital 
has an interest in it only insofar as this fulfilment of demand can be 
exploited in a usurious capitalistic way. 

We have in fact to do here with two fundamentally different 
attitudes to the economy. The only urgent demand on the entire 
economy from the side of the entire population is, naturally, the 
satisfaction of the need for food, then the fulfilment of the demand for 
housing and clothing, and only then are ranged in an assortment all 
the other daily requisites up to the higher arts and cultural pleasures. 
In between come the support services, the entire transport system and 
whatever is connected with it, trade and the financial system. The 
production of goods for its part has in a healthy economy the worthiest 
goal of covering the need in the best possible way through a payment 
which covers the production costs and includes a corresponding work- 
income for the entrepreneur and a suitable profit-share from which 
both unavoidable losses and improvements and renovations in the 
enterprise can be defrayed. 

The attention of the just entrepreneur is not directed to the 
attainment of immoderate profit in individual cases, even when 
fortunate accidents might make this possible. The just entrepreneur 
is completely conscious of his national economic tasks, to establish 
production in such a way that the need can be covered with the least 


Gottfried Feder 

costs for the user, that at the same time the enterprise grows and 
flourishes, that the production costs become ever smaller without the 
wages being reduced. 

Perhaps the most illuminating example of such a true way of 
entrepreneurial thought is Ernst Abbe, 70 the co-founder and director 
of the Zeiss works in Jena. This man has understood to a high degree of 
perfection this national economic task of the entrepreneur and sought 
to realise this to the best of his ability. 

But in this respect we have also, in general no reason to make 
special complaints about our entrepreneurs before the war. Men like 
Alfred Krupp, 71 Mannesmann, 72 Werner Siemens, 73 Thyssen, 74 
Borsig, 75 Krauss, Maffei, 76 etc. have secured for themselves even 
socially a place of honour in the history of German industry. They 
were all not ruled by one-sided pursuit of profit, they all remained 
simple and modest for themselves, only the prosperity of their works 
was their lodestar. 

Indeed, the tireless productive and inventive power of the German 
industry has resulted in the fact that not only the gigantic increase in 
population found work and bread but that, in spite of rising wages, in 
spite of a comprehensives improvement of the standard of living of 
all sections of the population, the most important products could be 
made cheaper thanks to ever new improvements and inventions. The 
German manual worker should never forget that he owes this to the 
brain- workers. 

70. [Ernst Abbe (1840-1905) was a physicist and entrepreneur who was hired by Carl Zeiss, 
the founder of the Jena company, Carl Zeiss AG that produced optical instruments and systems. 
Abbe became a co-owner of the firm.] 

71. [Alfred Krupp (1812-1887) was the son of Friedrich Krupp (1787-1826), who had founded 
the Krupp Cast Steel Company in 1811. During Alfred Krupp 's directorship, the company 
became the leading weapons manufacturing company of the age ] 

72. [Mannesmann was founded in 1890 and originally produced seamless steel tubes.] 

73. [Werner Siemens (1816-1892) was an inventor and founder of the Telegraphen-Bauanstalt 
company in 1847. Today Siemens AG is one of the largest electro-technological companies in 
the world.] 

74. [August Thyssen (1842-1926) founded the Thyssen-Foussol iron works in 1867 and 
acquired other heavy industrial companies which were amalgamated in 1926 into the Vereinigte 
Stahlwerke, the biggest mining and steel cartel in the world before the second World War.] 

75. [Borsig was a locomotive company founded by August Borsig (1804-1854) in 1 837.] 

76. [Krauss-Maffei is a machine-producing company that was founded in 1838.] 


The German State 

And another thing must be stressed here again with all emphasis: 
that the foundation and precondition for this high blossoming of the 
German economy was the powerfully led Bismarck Reich. These two 
factors, the united and therefore powerful political situation of the 
German Reich and the unprecedented industriousness of the German 
entrepreneurs and workers made it possible that a comprehensive 
raising of the standard of living of the entire population was registered, 
that the gigantic increase in population of Germany could be fed, 
clothed and housed and that the emigration from Germany sank to 
insignificant numbers. 

The numbers of the German migration in the decades after 1 870 
included only the healthy surplus of the German entrepreneurial and 
merchant spirit that streamed out into the world as the pioneers of 
German industriousness and German performance. 

For the most part the entire national economy of the German Reich 
did justice to the fundamental demands that we too place on a healthy 
national economy. 

The demand was amply covered. Nevertheless there appeared 
even at that time deep damages in our economy which were expressed 
in diverse ways. 

1 . Our state finances fell into ever greater debts at the same time 
in which the German people became ever richer and more powerful, in 
which the products of German industrial and trade efficiency conquered 
the sales markets of the world, at a time in which our internal economy 
strode from success to success and the medical and living conditions 
became better from year to year. 

Now, it is naturally not a good sign if the debts become increasingly 
bigger. Such a phenomenon always points to the fact that something 
is not in order. For it must indeed be considered as fully absurd and 
nonsensical if a state whose citizens enjoy increasing wealth does not 
at the same time find itself in a condition of healthy and flourishing 
state finances. This must be so much more surprising when to the 
German Reich and the federal states extraordinarily large revenues 
flowed from their railways, post and mining works, as well as from 
the state forests, etc., quite apart from the fact that the Reich and the 
federal states could, by virtue of their financial sovereignty, claim the 


Gottfried Feder 

considerable tax capacity of their citizens. 

2. A further deep-seated economic damage was the progressive 
debt of our agricultural and urban real estate. The movement of 
land reform that was applied against that correctly recognised a very 
important part of the entire problem without unfortunately achieving 
complete efficacy. 

3. The fact of the inflation of our industry through credit of all 
sorts should also have filled sharp-sighted observers with anxiety. 
Certainly, in times of increasing prosperity the commercial and 
industrial enterprises take the acceptance of foreign monies and the 
interest obligation bound with that lightly, because indeed the strongly 
increased work and income possibility permits the bearing of these 
burdens. But woe if economic crises set in! Then the use of interest- 
bound credit shows itself in its entire economic banefulness. 

The form of stock company that emerged in these years with 
the actual detachment of capital from work bound to it, that is, the 
separation of pure capitalistic interests in the profitability of money, on 
the part of the creditors, from the healthy cooperation of the individual 
entrepreneur and from the entire identification of his existence with his 
enterprise similarly sowed the seed of profound economic damages. 

4. The growing position of power of the money-brokering institutes, 
the banks, should have filled the honourable friend of the nation 
with anxiety. From servants of the economy the banks became the 
unrestricted masters of the entire national economy. In a noteworthy 
and significant way this growing position of power of the banks was 
in no way accompanied by a concurrent prosperity of our national 
economy, but, on the contrary, the more lamentable our economy 
became the more the banks aggrandised themselves. 

We do not wish here to go further into this development, there will 
be much to say on it in the discussion of the purely financial- and 
monetary-economy. The mention of the fourfold root of the great 
national economic damage through the financial and credit system 
was of great importance because precisely this aspect of the entire 
economy has become the opposite of a true national economy, namely 
a one-sided robber economy of the financial powers. 

One on whom the image of a body stricken with parasites does not 


The German State 

spontaneously impose itself must be very interested in the retention 
of the present situation or dependent on the beneficiaries of this 
exploitative economy. Unfortunately, the last is the case among a very 
great number of men. That is why the internal resistance to this modern 
economic robber baron system does not emerge in a corresponding 

It is especially bad that even the science, and indeed especially 
the science, that has to deal with these things dutifully is still, with 
a few exceptions (Othmar Spann), 77 within the spell of the current 
interest capitalistic economy and finds itself in dependence on it. The 
present-day national economy is not a leader towards the truth and to 
right knowledge but has become the spokesman of national economic 

All great truths and wisdom can be understood and contemplated in 
their essential aspects by every simple man. Not to be confused with this 
is the fact that it is naturally not so simple to arrive at such fundamental 
knowledge. To be sure, the knowledge itself, the intuition, is like a 
bright light that shines in the soul eternally thirsting for knowledge. 
Difficult however is the subsequent work of the understanding which 
must strenuously pile up brick upon brick in order to build up, with the 
most careful selection of materials, the entire thought-structure so that 
the finished work appears to everybody as self-evident. 

In such cases there is then no finer praise than when one occasionally 
comes to such thoughts by oneself. Thus did I receive, while I was 
working on this work (Summer 1923), an excellent work of a now 
old man, the Austrian engineer W. Schober, 78 in which the entire 
disastrous development of the Austrian financial and credit situation 

77. [Othmar Spann (1878-1950) was an Austrian anti-Socialist economist and sociologist 
influenced by the economic theories of Adam Muller (1779-1829) - who had opposed Adam 
Smith's materialistic liberal economics. He was professor at the University of Vienna from 
1919 until 1938, when he was barred from his professorship by the National Socialists after the 
Anschluss (annexation) of Austria. Although Spann sympathised with the nationalist orientation 
of the NSDAP, his views of a corporatist state were not entirely supported by the National 

78. [Wenzel Schober (1846-1928) was an Austrian railway engineer who - like the Viennese 
professor Josef Schlesinger (1830-1901) - identified in his economic writings the dependence 
on Jewish international finance as the chief cause of the economic problems of Austria. His 
major wor ks included Die Noth und ihre Ursachen, 3 vols., Vienna, 1880-82, and Die Valuta- 
Regalierung in Osterreich, 1892.] 


Gottfried Feeler 

was predicted with unprecedented clarity already 30 years ago. 

Schober pointed to the fact that only a complete departure from 
the fundamentally false national economic doctrines could stop the 
disastrous development of the national economy - unfortunately 
without the least success. 

The chief reason lay at that time in the fact that Schober's friends, 
of the Christian-Socialist Party, after an initial enthusiastic agreement, 
turned away from him with lazy excuses: "The time is not yet ripe", 
but in reality because it did not suit the Christian high finance. 

The bank stopped a long time ago being the trusted intermediary 
between savings capital and the claims of the economy and the working 
capital. Today, the big banks have their directors and delegates sitting 
in all stock companies. Nothing can take place without the bank's 
knowing of it. And what interest does the bank now have in the 
economy? It has a sole interest in the capital yielding as high a profit 
as possible; in what way is quite indifferent to it. It does not see its task 
in the fertilisation of the economy through the loan of money at the 
cheapest rates precisely when the national economy is threatened by 
crises of the worst sort - this however would be its highest task -; the 
big banks much rather tend to come forth precisely at that time with 
credit packages and credit notices when the manufacturing industry 
most urgently needs an anticipatory credit for its work. 

One may further consider the following: What need do the banks 
cover? - One will say: the need for money. Of course. But how and 
under what conditions? The baker, the shoemaker, the factory owner, 
the businessman, indeed cover the real need of food, clothing, etc., 
and they receive for that the equivalent value, the price, in money or 
through a transfer of money. Therewith the need is covered, and the 
factory owner, etc. has again working capital for purchases, payment 
of wages, and further manufacture. Here we see an economic circle 
completed. The producer covers the need of the user, the money 
fulfils its proper task as the intermediary of an exchange business and 
fertilises anew the economy in the hands of the producer. 

It is quite different in the case of the money-lending business. First, 
there does not exist for any bank any obligation to give away its ware 
- money - the way such an obligation exists, for example, for every 


The German State 

trader. It can therefore ensure that it gives money to only those who are 
favourable to it. Further, the bank demands, in the largest number of 
cases, securities that far exceed the value of the loan, it demands further 
a debt certificate according to which the debtor must pledge himself to 
the repayment of the debt with everything that he has and will earn. In 
other words, against the dispensing of money the bank draws into its 
power-domain assets that are far greater than the loaned sum; it also 
lets a debt certificate be handed out which exposes the work incomes 
of the debtor to its grasp. But that is not enough: for this doubly, and 
many times, secured loan of money, the bank lets itself be paid still 
more in the form of interests that become enormous overtime. We thus 
have to do here with a procedure which, considered economically, is 
not a productive performance at all, the return payment - pledge, debt 
certificate - is given immediately, and, besides that, the debtor must 
agree to another continuing payment which in a few years exceeds the 
value of the received money, without the pledger becoming free or 
the debt being resolved. Such a financial business is naturally national 
economically an absurdity, it is unadulterated usury. 

The true sense of credit, of the belief in the greater economic 
efficacy of another, is indeed that the owner of saved money does not 
see that he is in a position to use his money himself in a profitable 
way, he therefore turns to someone whom he can trust that he can 
entrust this money to and who offers him the guarantee that he will 
again return his savings to him at request fully and undiminished. If 
the loan strengthens the debtor in his economic work capacity that he 
could make considerably greater profits one can consider this as an act 
of fairness or gratitude if the debtor gives the creditor, apart from the 
return of the money, also a certain share of his profits. This conception 
of private monetary- and credit economy rules the entire Middle Ages, 
it formed the core of the Church s doctrine of interest. The demand of 
interest was considered as usury. Today, the interest that was judged 
to be usury by the Church has become indeed axiomatic of our entire 
economy - the national economic sense of credit has become a national 
economic nonsense. To be sure, for the moneyed man such a doctrine 
is the source of lasting effortless enrichment. Not really because gold 
is - as it would like to appear - really a power that produces money 


Gottfried Feder 

from itself, a superhuman phenomenon that, freed from the earthly 
laws of perishability, forces everything under its spell imperishably 
and forever, but because it is felt in modern financial and international 
economics simply as a law that every sort of financial possession bears 
in itself a claim to interest, to a certain degree innate in money, is 
this most monstrous reversal of the relation between work and money 
accepted as a law, as something that cannot be touched, as something 
for which the science dealing with it has to produce a great number of 
justifying reasons. 

Only in this way was it possible to divert the entire national 
economy from its sole and natural task of covering the need and 
therewith creating work and food for everybody and to misuse it 
primarily as an instrument for the personal enrichment of the owners 
of bank- and stock-exchange capital. 

It is now a favourite trick of the political battle against our movement 
that this opposition of ours against the high capitalistic exploitation of 
our national economy and our battle for a national economy satisfying 
the demands of social justice is portrayed as an opposition between 
property and other forms of possession, that our demand "Public 
interest before self-interest" is decried as Communistic. Against this, 
we should constantly point to Art. 8 of the national and economic 
programme (The Programme, p. 35): 

"National Socialism fundamentally recognises private property 
and places it under government protection ". 

It will however be the task of the legislation to draw the limits 
with regard to the hoarding of immoderate wealth in the hands of 
individuals at the expense of the whole. 

Positively and for the economy itself there arises, as a demand for 
the entire economy and its tasks in the spirit of National Socialism, 
demand No. 10 of the "National and Economic Programme": All 
Germans form a work community for the promotion of the common 
welfare and culture of the German people. 

From here is derived in turn the moral demand that every German 
must work intellectually and physically according to his strength, but 
that this work of his must be incorporated into the whole. 

I stress that this is a moral demand. It is a matter therefore not of 


The German State 

the establishment of a compulsion to work as has been introduced in 
Soviet Russia. Something quite different is the introduction demanded 
by us of a year of compulsory work for every German before the 
acquisition of full state citizenship rights. 

It is again quite different that our main goal aims precisely at 
securing a worry-free old age for all national comrades who have 
worked industriously in their youthful and adult years. Precisely in the 
case of a national economy which does not stand continuously under 
the blood-letting of an interest- and toll obligation to loan capital it 
will, and must and can, be easily achieved that it gives away large 
surpluses in such a way that to all national comrades a suitable and 
adequate old age pension - similar to the retirement pay of officials - 
is ensured on reaching a certain age or in the case of a work disability 
that has occurred prematurely. 

I bring in this social political demand here because the fulfilment 
of this task belongs to the performances of the entire national economy, 
because it is the point that is not only able to say constantly to the 
worker in the widest sense of the word: You must work!, but because, 
behind the work compulsion, it establishes something comforting and 
reconciling - the prospect of a secured old age for everybody who has 
done his duty all his life long. 

Within the scope of the fundamental recognition of private property 
as the foundation of our economy belongs naturally also the fact that 
every German is protected in his free possibility of earning a living 
and in the free disposal of his work-income and his acquired wealth 
(No. 11 of the "National and Economic Programme"). Limiting this 
basic right is only permissible through the law, whereby the guideline 
should be followed that only such work is considered as work that is 
not directed against the interests of the community. Chain-trade and 
profiteering also doubtlessly cause much work; similarly, a burglar 
will often shed more drops of sweat in his "work" than the mason in 
the building of a house, but such "work" is directed indeed only to 
one-sided personal enrichment at the cost and harm of others. Such 
"work" is therefore generally harmful and must therefore be punished 
with all severity. 

Such an express determination is in no way superfluous for, from 


Gottfried Feeler 

the practice of the law is apparent all too often, and to a frightful extent, 
how many things are designated there as honest work. There is also an 
entire series of activities which are very close to the border-line, where 
it is difficult to say that this work still harmonises "with the whole". 

In any case, legal tools must be created so that all these activities 
or enterprises that are directed against the national health in a physical 
or intellectual way may be suppressed. The same is true of the 
exploitation of the distress of the population through profiteering and 

For such vermin that are hostile to the nation we demand the death 
penalty. Financial penalty or even imprisonment is ineffective against 
such unscrupulous people. 

In short therefore the economic policy of National Socialism will 
work towards removing a basically false concentration of economics 
on profitability and for that reason to restore to honour the only right 
and reasonable task of national economics: the fulfilment of demand. 

This does not in any way exclude income and profit for the trader, 
factory owner and the honest businessmen; on the contrary, in no way 
should difficulties be created for the justified striving for earnings 
so long as this striving is contained within the scope of the public 

It is a matter therefore of a purgative action, and then of the 
maintenance of the German economy which is unobjectionable 
both in relation to its forms and with respect to its performances. By 
this is to be understood what No. 12 of the "National and Economic 
Programme" demands: The healthy combination of big-, medium- 
and small businesses in all fields of the economic life, thus also in 
agriculture, remains upheld. 

Therewith is also given the fundamental position of National 
Socialism to the different social orders. 

National Socialism will support and promote agriculturists 
through all means as the foundation of a powerful nation and of the 
nourishment of the population. 

If point 17 of the Programme contains a clause which envisages a 
free dispossession in special circumstances, by this was only meant, 
as Adolf Hitler proclaimed on April 13, 1928, the "creation of legal 


The German State 

possibilities of confiscating if necessary land that was acquired in 
an illegal way or not administered according to the viewpoint of the 
welfare of the people. This is directed thus mainly against the Jewish 
land speculation companies". This clause was therefore designed only 
for the protection of the native population. 

Especially dear to National Socialism lies also the prosperity and 
the independence of a healthy commercial and mercantile middle 

And even in the forms of production of the so-called heavy 
industry there is, from the point of view of National Socialism, 
nothing essential to be objected to. Precisely this large industry has 
rationalised everything in an exemplary way, that is, it has avoided 
no costs to bring about better and simpler production methods. The 
present overburdening of enterprises - aiming at communisation - 
with an excessive number of people who are really dispensable (we 
are thinking here mainly of the necessity of maintaining one's own 
tax- and insurance officers, etc.) naturally works directly against the 
nationalisation effort of industry. 

At the conclusion of these economic political tasks of National 
Socialism stands another enormous organisational performance: "The 
introduction of a year of work-service for every German". 

Even here it is a deeply moral principle that compels this demand 
- duty. 

One who wishes to exercise state-citizenship rights must have also 
served the state, he must also have proved himself duty-conscious and 
loyal to his state through deed and indeed without remuneration, that is, 
possibility of enrichment, exactly as the soldier serves his fatherland. 

We glimpse in the idea of the compulsory work service a fully 
supplementary idea to the idea of universal military service. 

As much as we would like to consider it possible to substantially 
reduce the training to become efficient soldiers compared to the earlier 
two- and three-year long service period, so much do we consider it 
necessary and advisable that every young German be acquainted with 
one or more commercial activities in which he can serve the state. 

The duty-consciousness with regard to the quality of work has 
suffered so much under the rule of the machine and under the still 


Gottfried Feder 

more devastating doctrine of the class hostility of the workers against 
the entrepreneurs that a tutoring in this field under tight state direction 
according to uniform principles seems completely indispensable. 
Precisely the entrepreneurs, in the good sense, will welcome such an 
institution and not consider it in any way as a competition. Such a work- 
army cannot be a competition already because, according to experience, 
every productive economic activity of the state must be excessively 
burdened with its official apparatus, because the employment and 
training of a young inexperienced workforce consumes too much of 
its efficiency. 

On the other hand, it will be the task of this year of work-service 
to better acquaint the young people in model state enterprises with 
all the progresses of technology. They should, if possible, cover the 
actual needs of the workforce and of the national comrades serving 

Thus a state competition with the rest of the national economy does 
not come into question, it could at most operate in certain fields as a 
price regulator with market prices that still leave to the free tradesmen 
and the free entrepreneurs a wide scope for a reasonable profit. 

It cannot be the task of this manifesto to go further into details. 
Nevertheless they must be sketched and illuminated briefly, for we 
know that a correct solution of this question will be of enormous 
advantage for the recovery of our economic morale, quite apart from 
the benefit that the entire economy will derive from the fact that the 
idea of duty with regard to work will be awakened as a moral duty 
with regard to the nation. 

With respect to the position of the state-citizen with regard to the 
national economy Bismarck once declared: 

"We do not live to be happy but to do our duty." 

This moral principle lies also at the basis of our position with 
regard to the state and the economy. 


The German State 

National financial reform - 
Money and credit in the National Socialist state 

The rule of interest 

The demand for the breaking of the interest-slavery is ground- 
breakingly new in a political programme. This fact alone would 
be enough for the widest circles to bring forward a most vehement 
opposition to National Socialism. 

By far the largest part of the opponents is constituted of those who 
have indeed lost everything through the present interest capitalistic 
economy and who, brought up in these ideas, still fear the loss of 
already lost privileges. This opposition indeed possesses no impetus, 
for precisely the lack of any internal impetus is characteristic of the 
circle trapped in the capital pension ideal. 

A further group is those who are dependent on loans or at least 
believe that they are. This group naturally fears not really the abolition 
of the obligation to pay interest but it fears that it would not receive 
any more working capital unless everything remains as before. 

Another group is the wonderful national economists for whom 
opposition to the problem of the liberation from interest is the alpha 
and omega of their national economic wisdom. 

A further group is the malicious who are indeed not of a better 
viewpoint but who, for personal or party tactical reasons, combat 
this basic demand of National Socialism with false assertions and 

That the circles of international finance exercising the rule of interest 
are, precisely on account of this demand, our most irreconcilable and 
bitter enemies is self-evident. 

With the exception of the malicious and the professionally 
interested opposition the chief reasons for a hostile and mistrustful 
attitude are - ignorance and intellectual laziness, stupidity. 

We have to do here with quite powerful opponents, with opponents 
among whom any system that one may try to enforce fails, who draw 
back like jelly-fish from the pressure of convincing explanations but 


Gottfried Feder 

immediately after the relaxation of the pressure flow back once again 
into the old ways of thought. 

So what is understood by "interest slavery"? By interest slavery 
is to be understood the interest-bound debt of the state and people to 
the supranational financial powers. Here therefore it is a matter of a 
new form of slavery, of the slavery to the rule of finance. This slavery 
is more frightful and cruel than any form of rule ever was under the 
rule of absolute princes, because it is exercised in an impersonal way, 
without any human feeling, obsessed only with an insatiable instinct 
to expand and enlarge, with a greed for power without comparison. 

The customary expression for the existence of this rule is: "Money 
moves the world". But here money is only used as a symbol of mastery 
for financial power. Money itself, the metal and paper currencies, are 
in themselves naturally neither good nor bad, and exercise no sort 
of rule. Money as a currency is indispensable for the exchange of 
goods and services. That is why all attempts to deal with the rule of 
the financial powers from the side of money alone are from the start 
erroneous and doomed to ineffectiveness, because in the case of this 
rule we are not indeed dealing with a question of the narrow monetary 
system but with questions of power. Money as an instrument of power 
is in itself, as mentioned, neither good nor bad, it depends only on its 
use. The fact that it can be also be used murderously, that is, misused 
does not in any way neutralise its endlessly various and indispensable 
useful usage possibilities. Even money, applied in a useful way, has 
a beneficial effect on the national economy. Money has not wrongly 
been called the blood in the national economic body. So long as money 
remains true to its task as a means of exchange, so long as money 
received or earned is again directed back to the economy, it cannot 
exercise any harmful influence on the national economy. 

Now there comes in a factor: that is the desire to use money as 
a savings method. This desire is itself completely justified, on the 
contrary, it is only to be fully wished that the savings sense may be 
restored to honour again if - yes, if - savings were indeed possible at all 
in the present-day circumstances. The lasting, threatening devaluation 
of our German money through an irresponsible State financial policy 
indeed makes saving a stupidity, for, after a few weeks or days, the 


The German State 

value of the money can have sunk to a fraction of its earlier value. 
Therefore if money should fulfil its task as savings money, it must be 
of stable value. 

Since the German money, for reasons that we shall still have to 
investigate, is not of stable value at the moment and also cannot be of 
stable value, the German saver looks around in every unstable period 
for such money of stable value. Such a money of stable value is the 
so-called noble currencies, the dollars, the Swiss francs and Dutch 
gulden, the monies of the Scandinavian peoples, etc., as well as the 
metallic money from precious metals. 

But now the national economic task of money as the working 
capital of the economy stands opposed to this desire for accumulation 
of stable money. To understand this question in its entire depth we 
must adhere to the fact that money according to its essence is and 
should be nothing but a "token of performed work". The customary 
explanation: 'Money is a means of exchange' is in no way false, but 
it does not exhaust the question. It is a task of money, and indeed its 
most important one, to mediate the exchange of goods. But this task 
is fulfilled also by other things like the tea-packets of the Chinese, the 
cowry shells of the negroes, etc. The innermost essence of the money 
dispensed by the state today, as well as of the money surrogates, is that 
they are tokens - one could also say vouchers - of som e work performed 
by other persons. By "performed work" we must understand quite 
comprehensively every economic product, thus also raw materials, for 
even these have commercial or sales value only if they are quarried and 
if they are brought to the market. In order to facilitate this exchange 
of goods among themselves, indeed in order to make this possible at 
all in a complicated economy, a means of exchange had to be invented 
which would directly make it possible that the producer of only one 
ware would be able to satisfy his own manifold needs through this 
means of exchange, which had a general validity. A cobbler makes 
shoes and boots year in, year out - but he needs his daily bread, meat, 
milk, eggs, he needs clothing and so on. The baker, from whom the 
cobbler buys his bread, may indeed need one or two pairs of boots in 
a year, but he cannot really be paid the whole year through for all the 
bread that everybody eats with only boots, he must indeed also pay 


Gottfried Feder 

his miller and firewood supplier for flour and fuel, but these can also 
not use any more boots because they themselves already get boots and 
shoes from another cobbler. But the baker cannot naturally pay the 
miller for his flour with his own products, the baker must bake bread 
for the community. In other words: a pure exchange economy is quite 
impossible in a developed national economy with an extensive division 
of labour. An exchange intermediary is therefore indispensable. In the 
most general form this exchange intermediary must be a generally 
recognised record, protected by the state, of the productions of the 
national economy; one must also be able to buy something with these 
records and everybody must be obliged to provide his commercial 
products for this exchange money. 

It is, for example, also erroneous to say that money is a record of 
a performed work. Certainly, one accepts this money as a performed 
work, but not because an economic cycle is already completed 
therewith but because this money is indeed a record of every one of 
many performed work-activities - records with which everybody can 
satisfy his requirement for life-necessities and his other needs. Only 
when this need is covered and the money is fed back into the economy 
is the basic cycle of money completed. But if the money remains lying 
as hoarded or saved money in one hand, then only half an exchange, 
only half a cycle is executed. The money has not yet fulfilled its goal, 
on the contrary, it has been withdrawn from the goal for which it 
was invented and for which it exists. We must fundamentally declare 
that this interruption of the national economic task of money is, for 
national economic and national political reasons, impermissible. It 
obviously cannot be that every financial amount received must be 
immediately given out, that the financial market must be provided 
so abundantly with money that every private person can make his 
economic arrangements in such a way that he preserves for himself 
sums for the covering of his monthly requirements or the amounts for 
larger one-time yearly services, but it must be declared as completely 
inadmissible national economically that the currency dispensed by the 
state for the welfare of the community is withdrawn from the public 
circulation as hoarded money. 

To the financial system therefore corresponds also the duty to 


The German State 

spend, that is, the duty to bring acquired money back into circulation. 

One may also specify here again quite sharply that savings is 
therewith in no way made impossible. Savings, understood rightly, is 
in no way the avaricious and miserly hoarding of money but - if one 
wishes to employ the favourite combination of the idea of savings 
with children's relief - , it is the creation and acquisition of goods, 
the purchase or building of a small house, the purchase of valuable 
objects, of collections, books, pictures, household goods, the expansion 
and improvement of the business establishment, the extension of the 
stocks, etc., and that is a far better "savings" than the hoarding of 

Precisely we Germans have had to undergo an education in world- 
view of the grandest style on this question. This correct "savings" just 
described has rewarded itself best, the false one focussed on money 
has been bitterly avenged. 

This unerringly correct feeling of the people even for these matters 
has been reflected quite correctly in sagas and fairy-tales. The hoarded 
money is transformed into worthless clod or it disappears, or it brings 
endless misfortune. On the other hand, always and everywhere, the 
one who, out of his industriousness, has "achieved something" - and 
by that healthy reasoning always understands a blooming private 
economy, be it mercantile, commercial or industrial - has acquired 
respect and esteem. Such a development of wealth is unobjectionable, 
it is not directed against the spirit of money, it is, as a thriving member 
of the entire economy, social in the best sense. 

After these brief but necessary, because essential, observations 
on the financial system let us return to the point of departure of our 
question: "What do we mean by interest-slavery.?" 

If, through the withholding of money in the hands of people who 
are not conscious of the national economic task of money, or still 
more in the hands of those who wish to use the collected money as 
an instrument of power, a deadlock arises, the money that remains in 
circulation becomes scarcer, there appears a money squeeze. But those 
who possess money still do not, in a national economically healthy 
manner, put their money back into circulation because they for their 
part satisfied continuing needs and had houses built or purchased other 


Gottfried Feder 

commercial or industrial products. They therefore do not take away 
from the businessman or the factory owner, who definitely needs the 
working capital for the maintenance of his enterprise, his products but 
they give him the money withheld by them illegitimately, in a national 
economic sense, against a special toll - against interest. The national 
economic squeeze begins. 

The relation of the production of goods - the producer - of the 
national economic worker to money is at one stroke turned upside 
down. The money that was, according to its essence and its invention, 
to serve the economy has suddenly emancipated itself and exercises 
a squeeze on the production of goods. The financial rule begins. 
Certainly the private economy is glad that it can maintain its enterprises 
at least in this way, for it feels itself bound to serve production national 
economically. The money hoarder derives from this feeling of national 
economic duty of the national economic worker a double benefit: first 
he has a debt certificate drawn up - thus a legal title - according to 
which the debtor with his entire wealth is liable for the undiminished 
repayment of the loaned sums, in most cases other definite objects 
of wealth are quite especially pledged, and secondly, the debtor must 
pledge himself further to a continuous extra payment which one calls 

The guaranteed credit is thus not given for reasons which would 
correspond to the literal sense of the word credit, that is, to the trust 
in the greater economic efficacy and performance capacity, but purely 
with the intention of exploiting the need of the economic entrepreneur 
to procure for oneself without any effort a part of his work-income. The 
credit is also not given to therewith promote production, but solely to 
make the possession of money "profitable". To what businesses the 
credit is used is basically a matter of complete indifference to the 
creditor; if he is interested in it, this happens only in order to assure 
himself that his money is safe and, above all, that it is also effectively 

Observed generally, the credit system that is mediated by the 
banks is today built up in such a way that generally the capitalist, the 
possessor of money and credit, is fully detached from work. He has 
no relationship at all of a personal nature to the different branches 


The German State 

of production in which he "lets his money work", as the favourite 
misleading expression goes. What does the share-holder know of 
"Girmes", "Poge", "Weser", "Riebeck Montan", "Otavi", "Salitrera", 
"Steaua Romana", 79 what does he know what is manufactured in these 
works? He does not have any interest in it, he has only the one-sided 
interest whether the shares rise or fall, and how high the dividends 
are that his capital yields. It is also a matter of complete indifference 
whether the stock companies or the other forms of capitalistic activity 
(joint-stock company, society with limited liability, union, etc.) serve 
production in general. The main thing, the only decisive thing is - the 
"profitability". A proof of the fact is the enormous popularity that the 
bank shares enjoy. The big banks, as well as every credit institution, 
perform in general no productive work in the sense of the production 
of goods. Here, in the big bank system, the idea of interest - that is, the 
possibility of transferring a gigantic share of the incomes of productive 
work into the possession of the mere money-owner, and indeed, for 
the latter, completely effortlessly - celebrates real orgies. Today there 
is almost no more enterprise that is not dependent in some form on the 
bank, that is not run in a purely interest-capitalistic form. The entire 
national economic work is dependent on the bank- and stock-exchange 
capital and interest-bound to it. 

The lords of the banks - the high finance - are therewith also the 
lords of production. It is dependent on them whether the work comes 
to a stop or whether the market is deluged with an enormous amount 
of rubbish. For the organised private sector the fulfilment of demand 
is totally an incidental matter. 

In the case of this interest capitalistic economic form of the modern 
credit system we thus have to do with the most complete national 
economic immorality, with a total perversion of the meaning of the 
financial and credit system as of a servant of the economy into the 
position of absolute lord of the economy. 

Creative and productive work has become the slave and the 
cunningly rapacious, eternally mobile Jewish spirit of usury rules the 

79. [Girmes is a textile company founded by Johannes Girmes (1854-1912); Weser was a ship- 
building company, Riebeck-Montan was a mining company, Otavi was a mining and railway 
company, Salitrera was a Chilean saltpetre company, Steaua Romana is a Romanian oil-refining 


Gottfried Feder 

world. A piece of extortion only possible through the conjuring up 
of an artificial state of emergency through a national economically 
illegitimate withholding of money. And that is considered today as 
just, as a right nobody dares touch because it brings him into conflict 
with the world-ruling power of large loan capital. 

The slavery to interest has been perfected! 
It was perfected through the fact that the seductive arts of the 
mobile spirit succeeded in tying even the state, the given protector of 
the financial system, to the interest slavery so that it too, with bound 
hands, acknowledges international capital as its lord and has allowed 
itself to be diverted from its actual task as the protector of the national 
economy into the position of the bailiff, the interest-collector for large 
loan capital. 


The German State 

The national financial economy 

It is now our special task to trace this development of the 
national financial economy. 

Even here it will be the right way to start from a determination of 
the facts as they are found today. 

The outstanding phenomenon in the national life of the nations 
of the western cultural circle is the enormous debt of all the states. 
Whether victor or vanquished, all bear gigantic debt burdens in their 
national economies affected severely by the war. 

The most significant statistical work of the British Empire is The 
Statesman Yearbook; this official national yearbook gives for the 
individual states a precise overview of the condition of their public 
debts, etc. 

According to it, the debt of England - that is, of the English working 
class - to international capital - on March 3 1 , 1930, was 7,596,000,000 
pounds sterling with a yearly interest payment of around 350 million 
pounds sterling. It is quite useful to convert this sum into German 
marks, since one sees best in this way that in this interest question it is 
a matter of an international question of the widest scope. 

France owes to its internal and foreign interest creditors around 
279 billion gold francs. 

The United States of North America, the blessed land of the dollar, 
bears a public debt burden of around 16 billion dollars. 

In Canada, Australia, India, Italy, Czechoslovakia, Poland, 
everywhere we find the same miserable picture of a hopeless debt 
of the states and, therewith, of the peoples to international capital. 
Everywhere the national life revolves around one question: How do 
we pay the interest for our loans, that is, for our debts to international 
finance, to the large loan capital? 

The finance ministries in all states are relentlessly occupied in 
tapping new tax sources, the parliaments advise for months on the 
new tax bills, but all resistance is useless. Before the majesty of the 


Gottfried Feder 

international usurious capital and its chartered "legal" claims to the 
interest payments parliaments and governments collapse over and 
over again and oppress their peoples with unprecedented tax burdens, 
instead of their daring to put an end to this enormous international 
fraud with a flat 'No'. 

Injustice became the law, the lord a slave. 

How things stand in our poor fatherland we experience daily and 

Violently and powerfully did the young German work-giant rise 
up after he had achieved a national unity through blood and iron. 
His tireless work, his creative spirit brought ever new inventions. 
The German entrepreneurial spirit and daring conquered the markets 
of the world. With amazed anxiety the French and English loan 
capital of the Rothschilds and the other bank magnates, as well as 
the trust capital of the American financial people, the Kahns, Loebs, 
Speyers, etc, saw itself threatened most seriously in its profitability. 
The value of the German mark, that is the quality and cheapness of 
German products, continued to rise, one could figure out when the 
mark would reach the value of the dollar until the English world 
trade would be surpassed by by Germany, one saw how all over the 
world the German transport installations, the German educational 
institutions, the German sanitational organisations, the German urban 
administrations, the German military methods were taken as a model, 
one saw how everywhere in the world German engineers as pioneers 
of German work capacity built railways, bridges and streets. But all 
this meant that the profitability of the capital loaned out all over the 
world by international finance was threatened. Then did international 
finance decide, with the help of international Freemasonry, to encircle 
Germany and, through the use of all the means of lies and slander, 
to represent Germany as the enemy of the world. - Edward VII was 
a only a piece pushed forward in this chess game. The nationalist 
passions were stoked against Germany, in England as well as in 
France. Indicating the political prehistory of the world war does not 
belong here, but it is in any case certain that Germany's side, in spite 
of its military strength, was lost, because there cannot in general be 
any talk of a political counter-game against the game of intrigue of the 


The German State 

Entente powers (cf. Rosenberg, International Freemasonry).^ 

Even the only group that still had a foreign political instinct in 
Germany, the All German, 81 did not have any idea that this powerful 
struggle between the armed nations was not about political success 
but was directed to the goal of the financial subjection of the German 
workers to the interest slavery of international capital. The militaristic 
overpowering of Germany was naturally France's special goal, the 
destruction of the German navy the special goal of England, but above 
both these imperialistic goals of France and England stood always the 
striving for world-rule of international capital. 

While thus the nations tore one another apart in wild struggle and 
the blood of the best flowed in streams on the battlefields, Jewry of 
the entire world was in movement. For All-Judah the harvest time had 

High finance financed the world war; in all the nations of the 
world the Jewish scribes sat in the editorial offices of the international 
press and lied to and instigated the nations to ever new efforts against 
one another. 26 states were in this way led into the war against the 
Central Powers. From the east there flowed in a stream of eastern 
Jews over the German lands; these thrust themselves forward, haggled 
and hogged and enriched themselves, took possession of the flats in 
the cities and acquired everything that they could get. In the military 
industrial companies this business of the plundering and misrule of the 
German workforce was taken care of by the members of the Jewish 
race, and the Jews forced themselves forward and up into all positions 
of the state and economy. The internal demoralisation was likewise 
consciously led by Jews, the Haases, Dittmanns, Cohns, Luxemburgs, 
Barths, then the Parvus-Helphands, Eisners, Leviens, Gradnauers 82 
agitated and incited, supported by ambitious people, fools and power- 
hungry criminals against the German people. 

In this way did the German nation finally collapse from inside. 

80 [Alfred Rosenberg published a work entitled Das Verbrechen der Freimanrerei (1921), 
as well as Freimaurerische Weltpolitik im Lichte der kritischen Forschung (1929) in the 
Nationsozialistische Bibliothek series, vol.9.] 

8 1 . [The Alldeutscher Verband was a German nationalist organisation founded in 1 89 1 . During 
the first World War, the association promoted German expansionist goals and, after the war, it 
supported general Erich Ludendorff (1865-1937) in his claim that Germany had been betrayed 
("stabbed in the back") in the war by socialists and democrats.] 


Gottfried Feder 

Judah's star rose blood-red. The last nation that had firmly resisted 
the international finance and its witchcraft collapsed, it threw down 
its arms and bowed before the frightful yoke of the Versailles dictate. 
Bleeding from a thousand wounds, leaderless, not really on account 
of the expulsion of the princes, for precisely these had fully failed 
as real leaders, the German nation was led by its parliaments and 
parliamentary governments with the fateful sentence that can always 
be applied at such times, with the phrase, "To avoid worse", into the 
interest-slavery to loan capital. 

82. [[Hugo Haase (1863-1919) was a Jewish socialist who became chairman of the 
Socialdemokratische Partei Deutschlands (SPD), along with the German August Bebel, in 1 9 1 1 . 
He professed to be a pacifist and organised a huge anti-war rally in July 1914. 

Wilhelm Dittmann (1874-1954) was a prominent member of the SPD who was sentenced to 
imprisonment for his participation in the Berlin armament workers' strike in February 1918. 
During and after the November Revolution following the end of the first World War, Dittmann 
played an active parliamentary role as member of the Independent Social Democratic Party of 
Germany (USPD). In 1933, after Hitler's rise to power, Dittmann fled to Switzerland.] 

Oskar Cohn (1869-1934) was a Jewish politician who worked with Karl Liebknecht, the 
founder of the Spartacist League, and was a staunch Zionist. He fled to Paris in 1933. 

Rosa Luxemburg (1871-1919) was a Jewish Marxist who founded, along with Liebknecht, 
the Spartacist League which eventually became the Communist Party of Germany (KPD). Both 
Luxemburg and Liebknecht were assassinated by the Freikorps in 1919. 

Emil Barth ( 1 879- 1 94 1 ) joined the USPD in 1 9 1 7 and one of the six members of the Council 
of deputies of the people (Rat der Volksbeauftragten) set up in November 1918 after the fall of 
the German monarchy (the other members being Friedrich Ebert, Philipp Scheidemann and Otto 
Landsberg of the SPD and Haase and Dittman of the USPD.] 

Alexander Parvus (ne Israel Helfand) (1867-1924) was a ghetto Jew from Belarus who was 
instrumental in effecting the Marxist strategy of a "permanent revolution" through his various 
international contacts with Rosa Luxemburg, Lenin, Trotsky and the Young Turks. 

Max Levien (1885-1937) was a Russian Jewish Bolshevik who became a German citizen in 
1 9 1 3 and member of the KPD (Communist Party of Germany). In April 1919, Levien established 
the Bavarian Soviet Republic along with another Russian Jewish member of the KPD, Eugen 
Levine (1883-1919). But this 'Soviet' experiment was put down by President Friedrich Ebert, 
who employed the Freikorps to maintain order in Munich. Levine was arrested and executed by 
the Freikorps in May 1919, but Levien fled to Austria and the Soviet Union, where he too was 
executed in 1937 during Stalin's Great Purge. 

Georg Gradnauer (1866-1946) was a Jewish member of the SPD who served as the first 
Minister-President of Saxony after the abolition of the Kingdom of Saxony. A moderate socialist, 
he attempted to quell the radicals in Leipzig with the help of the Freikorps, following the example 
of Ebert in Munich. This cost him electorally and he was forced to resign in 1920.] 


The German State 

The Versailles dictate 

The Dawes Pact and the Young Plan 

The goal of the world war had been reached: Germany, the most 
industrious and efficient nation of the world removed as a competitor 
on the world market, militarily overpowered, made leaderless 
and seduced and poisoned by the false Marxist doctrines, morally 
dissipated and buried under a mountain of debts that it can never again 
remove from itself, but had to serve for ever as an interest slave to 
international capital. 

According to the London payment plan, Germany has had to 
acknowledge an interest-bearing debt of 132 billion gold marks, and 
to this debt was added also the interests. 

It would be ridiculous if it were not so frightfully serious and if 
the enemies did not take it so mercilessly precisely contrary to all the 
platitudes of the pacifists, "but it will not be so bad", and "reasonableness 
will triumph". No! It will not triumph! And the international finance 
will do everything to keep Germany continuously in this interest 
slavery. Only we can free ourselves. 

It is the deep tragedy of the German nation that, as efficient as 
it in general is in its narrow work circle, it immediately becomes 
uncertain when it raises its glance beyond the limits of the daily work 
and stands before the great world occurrences. Here the conscientious 
and precise German loses all measure, he becomes a visionary and 
enthusiast. The "German professor", who performs outstanding things 
in his specialisation becomes, faced with the things of the world, an 
object of the comic papers, from the forgetting of his umbrella to the 
gushing prolixity of the ideologues; the German officer, trusting in 
the excellent efficiency of his troops, is inclined to underestimate the 
spiritual imponderables of a political nature and the power of ideas, 
and thereby to place the final success in doubt; the German official 
tends to think of himself as a boss of the population instead of as the 
servant of the whole. 

So we see in great and small this disastrous trait in the German 


Gottfried Feder 

character: the Germans are specialists and dreamers. Individually more 
efficient and industrious in all special fields than any people, even 
completely capable of becoming enthusiastic about any great idea and 
with heroic bravery giving their life for an idea, but less skilled in 
seeing and hitting on the right solution within the intervening circle of 
international economic and political matters. 

The reflection of such a fundamental character-trait in the German 
in the political field is his so oft lamented lack of national feeling and his 
political incompetence. The average German lacks to a certain degree 
the sense of large orderings; thus he also does not mostly understand 
that those debt figures are really his destiny, that those figures, that the 
acknowledgement of this debt and the willingness and the attempt to 
pay this debt in money and material goods is the basic reason for the 
entire desperate situation of the German nation. Much less does he 
see, however, that the beneficiaries of this German payment obligation 
are not really the other nations but solely - international finance. 

To international finance, however, the repayment of the loan is 
in no way important, only the lasting obligation to interest. That and 
that alone is why international finance, which composed the Versailles 
dictate in its financial parts, set the basic sum so fantastically high 
from the start that a repayment can never be thought of but, even 
in an eventual reduction of the basic sum (in any case only with a 
simultaneous raising of the interest rate), Germany will permanently 
be held in interest-slavery. 

The imposition of this interest rule over our poor industrious 
people was the final goal of the world war, it was the goal of high 
finance and this goal has been fully reached. 

The relevant clauses of the Versailles dictate are so frightful, they 
show so clearly the entire seriousness and the destructive hardness 
of this interest rule which delivers everything that we have and that 
we work for to the grasp of international finance that I cite them in 
excerpts in the following: 

Art.23 1 . The Allied and associated governments declare, and Germany 
acknowledges (!), that Germany and its allies are, as the originators (!), 
responsible for all the losses and damages that the Allies and associated 
governments and their members have suffered as a result of the war 


The German State 

forced upon them by the attack of Germany and its allies. 

Although it is quite cynically acknowledged in Art. 232 "that 
Germany's resources are not sufficient to ensure the complete restitution 
of all these losses and damages", the obligation is nevertheless 
demanded "that all these losses and damages be compensated". 

Art.233 says: "The extent of the damages will be determined by the 
Reparations Commission. 

Art.234 says: "The Reparations Commission will periodically test 
the payment capacity of Germany . . . But it cannot waive any amount 
without the approval of the different governments represented in the 

Art.234 determines: "Germany will pay before the determination of the 

final amount of the compensation claim ... 20 billion marks in gold (in 

gold, goods, ships, securities or in other ways)" 

Germany will besides issue the bonds indicated in Art. 12c of Annex 


And now comes, prettily stowed away and near the end in this Annex 
II Art. 12c in Section VIII of the so-called Versailles Peace Treaty, the 
financial political strangulation of Germany. This Art. 12 says in its 
most important points as follows: 

The Commission has all powers and exercises all authority that are 
guaranteed to it in this treaty. 

The Commission has, in general, the most comprehensive power 
of supervision and enforcement with respect to the questions of 
the reparation. It has to observe the following conditions and 

a) Every part of the entire amount of the determined demands that is 
not paid in gold, ships, securities or goods or in another way must 
be secured by Germany under the conditions determined by the 
Commission through the transfer of a corresponding amount to bonds 
or obligations of any sort in order to effect an acknowledgement of the 
owed amount. 

b) The Commission will periodically evaluate Germany's payment 
capacity and examine the German tax system (!), so that, first, all 
revenues of Germany, including the revenues determined for the 


Gottfried Feder 

interest- and debt servicing of its domestic loans are preferably (!) used 
for the payment of the sums that it owes under the title or reparations, 
and secondly, in order to obtain the certainty that the German tax system 
is exactly (!) as oppressive as that of any other power represented in 
the Commission. 

This paragraph is diabolically focussed on the lasting suppression 
of Germany, it practically contains the possibility, with the reference 
to some small robber state in which unrestricted taxes are decreed, of 
simply stipulating the imposition of the same taxes even in Germany. 
But it also acknowledges at the same time with brutal frankness that 
even the other nations should be held in the same debt-slavery. And 
now comes the infamous paragraph c. 

c) In order to facilitate and carry out the restoration of the economic 
life in the Allied and associated countries, the Commission will, 
as arranged in Art.232, receive a first payment from Germany as a 
guarantee and acknowledgement of its guilt, consisting of bonds to the 
holders, payable in gold, that are free of every tax or charge of any sort 
(!) that are introduced or can be introduced by the governments of the 
Reich or of the German states. These bonds are given as instalments 
(!) and that in three instalments as determined below: 

1. 20 billion gold marks are to be paid immediately 

2. 40 billion gold marks will be given in bonds that are to bear interest 
at at an additional charge of 5% + 1% for amortisation from 1926. 

3. A written obligation to pay 40 billion gold marks more in bonds, 
with 5% interest as coverage, will be given immediately. 

This clause is the core of the entire Versailles dictate . We know 
that the the London Ultimatum 83 not only set fewer payments but, on 
the contrary, set the entire amount at 132 billion gold marks. Art. 16 
then declares expressly: "From 1 May, 1921 the German government 
has to pay for the interests on their debt". The interest rate is set at 5 

83. [After the Inter-Allied Reparations Commission had, in January 1921, set the amount that 
Germany had to pay as reparations at 269 billion gold marks, the British Prime Minister David 
Lloyd-George presented, on May 5, 1921, a six-day ultimatum to the German ambassador in 
London, whereby, if Germany did not acknowledge the repayment of 132 billion marks (a 
somewhat different calculation than the 269 billion of January) as well as the other dictates of 
the Versailles Treaty, the Allies would occupy the Ruhr region.] 


The German State 


Then follows Art. 17 which gives a handle to every violation: 

Art. 17. If Germany should be late in the fulfilment of any debt that 
the previous section of the treaty lays upon it, the Commission will 
immediately inform every participant power of this default and 
simultaneously propose the measures to be taken against it. 

And now follows one of the most outrageous clauses of the 
entire treaty: 

Art. 18. Germany pledges not to interpret the measures that the Allied 
and associated powers are justified (and what would not be justified in 
the eyes of the enemies?) in adopting against an intentional (!) non- 
compliance of Germany as hostile treatment ( ! ! ). These measures could 
consist of import prohibitions and economic and financial sanctions 
and in general (!) in all measures (!) that could appear to the concerned 
governments as demanded by circumstances. 

With this clause naturally the door and gate are opened to every, 
even the most brutal, terror, and the German government has further 
expressly signed that it may not consider even the greatest oppression, 
murder of Germans, the most brutal expulsions, plundering, destruction, 
etc. "as hostile treatment"! 

This written delivery of the German people to a cruel, vengeful, 
implacable enemy is, further, envisaged forever, for Art.23 says: 

The Commission will be dissolved when Germany and its allies have 
paid all the amounts that it owes for the implementation of the present 
treaty or according to the decisions of the Commission and when all 
these amounts or their equivalents are distributed to the participant 

This is the eternal interest slavery of Germany. 

Perhaps our political friends and enemies will understand now what 
must be understood by interest slavery, perhaps one will understand 
why the breaking of this frightful interest slavery stands at the centre 
of our demands. Perhaps one will understand also why in the case of 


Gottfried Feder 

this demand it is a matter of an international question of the very first 
order. It is for Germany simply a question of destiny and even for the 
other nations it is the most decisive question for the recovery. 

Compared to this international question, all the other questions 
sink into nothingness, for without the breaking of interest slavery a rise 
of productive nations is in general not possible. If the interest slavery 
now initiated is maintained, the god Mammon would have ascended 
the throne. God is dead, the souls of the nations die, a human mess fills 
the world as interest slaves of international finance. Money rules the 

The regulations of the Versailles dictate were essential points 
substituted in 1 924 by the Dawes Pact. Now after the fears of inflation 
the further plundering of Germany was to continue "on a more solid 
foundation". High finance allowed assurances of all sorts to be issued 
among which the most significant and far-reaching are to be mentioned 
the denationalisation of the Reichsbank and Reich railways. In spite 
of all the "silver cloud" prophecies, the German economy continued 
to collapse, the impossibility of the payments according to the Dawes 
Pact was finally perceived even by the blindly raging sadists of the 
implementation. The Young Plan entered in place of the Dawes Pact. 
It was supposed to bring "alleviations". Now the end has come. 

On the horrors of the Dawes Pact Vol.7 of the National Socialist 
Library (Price 1.80 marks) gives the most precise information, which 
contains a reprint of the original text along with a comprehensive 
critical commentary. Vol.13 of the present series deals with the main 
points of the Young Plan. 


The German State 

The loan economy 

"If the state needs money, it must borrow this money from those 
of its citizens who have more of it than they themselves can use. It 
must naturally pay interest for the return of this money, or else it 
will not receive the money, it has indeed already enough difficulty in 
accommodating its loans". 

This formulation was used by the former Socialist minister 
Dr. David 84 with me in a discussion in Berlin. I have placed this 
formulation here intentionally because it reflects in an exemplary way 
the interest capitalistic way of thought of our age; that he was of all 
things a Marxist gives the whole a special attraction. 

Now I know from hundreds of discussions and lectures that 
the above formulation is derived so fully from the present interest 
capitalistic world of ideas that hardly anybody would feel the falseness 
of this explanation of the interest- and debt economy of the state, let 
alone find a correct answer to it. 

This has a very simple psychological reason, namely that the above 
explanation given above applies to the coverage of the monetary need 
of a private man within the scope of the interest-capitalistic form of 
the economy. 

For the individual private man, as for the private economy in 
general, the sentence is true: "If anybody needs money, he must borrow 
this money against interest from those who possess more money than 
they themselves can use". 

But we must indeed avoid answering questions of national financial 
economy from a private capitalistic viewpoint but from a statesmanly. 
I mean that it would be indeed a major misfortune if one simply 
transferred this private economic way of thought unquestioningly to 
the national economy. 

The state with its instruments of power, its sovereign power is 
indeed not to be equated with any random private man. The state 

84. [Eduard David (1863-1930) served as Minister of the Interior in the Weimar Republic from 
June to October 1919.] 


Gottfried Feder 

possesses three powerful possibilities through which, by virtue of its 
sovereignty, it can cover its need for the execution of its tasks. These 
are its service sovereignty, its coinage sovereignty and its financial 

By service sovereignty is to be understood the sovereign right of 
the state to call on its citizens for free services. This sovereignty of the 
state over the individual is revealed in its most powerful scope in the 
compulsory military service and still more in the war service. Faced 
with the demands that the state can demand of its citizens in war time, 
all private considerations must step back. Family, profession, business 
and earnings, everything must be silent when the state calls its sons 
to the flag. But the state can call its citizens not only to war service, 
the state can call them even to great economic undertakings, we 
remember the auxiliary service law that however, unfortunately, quite 
in contrast to the military service, provided a high and ever increasing 
payment for the performed services so that soon a deep cleft arose 
between the front soldiers, who had to offer their lives daily for the 
fatherland - without payment - and those who were employed, in the 
homeland, protected behind the front, at a high wage. Just in passing, 
the strong performances of other nations that were based on service 
obligations may also be recalled: we recall the building of the Chinese 
Wall, the circumvallation of our mediaeval cities. Practically therefore 
it would stand completely within the power sovereignty of the state 
to revive and expand the old hand- and team- service 85 and to solve 
large economic tasks with them in this way for the disposal of existing 

The coinage sovereignty of the state is a second source of power 
from which the state can directly cover its money requirement. Nobody 
contests the state's right to mint coins or to issue treasury notes, indeed 
beyond that the state has, by virtue of its sovereignty, produced money 
from every possible source. From copper, nickel, iron, porcelain, 
aluminium and, above all, from - paper. I need only to recall the 
time when our Reich government considered it justified to issue daily 
100,000,000,000,000 marks and ever more new paper money. We 
shall not go in greater detail here into the question of whether this 

85. [The farming services, either manual or with animals, demanded of farmers by their lords in 
the Middle Ages], 


The German State 

was right and acceptable, we have to state here only that the state can 
actually cover its need by virtue of its coinage sovereignty, and that it 
is not forced "to borrow money on interest from those of its citizens 
who have more of it than they themselves can use". 

The financial sovereignty or the tax sovereignty of the state will 
likewise not be able to be contested by anybody, and one who contested 
this and sought to conduct it practically as an individual would be 
able to feel the authority of the state in the form of the bailiff. The 
financial or tax sovereignty of the state, that is, the right of the state 
to call on its citizens to financial services, is as obvious and as old as 
state structures. This form is also the most natural and healthy, even 
though in this field it has been reserved to our times to transform the 
reasonable sense of taxation into a complete nonsense and to make 
of the tax system a means for the total plundering of the people in 
favour of the supranational financial powers. Even here the question 
of the permissibility of taxes should not occupy us further but only 
the fact that the state is very well able to cover its money requirement 
by way of taxes, thus, again, by a way that is not open to the private 
economy, but which absolutely removes from the state the necessity 
of coming up with its money requirement through the adoption of an 
interest payment obligation to the capitalists. 

Certainly the state, like every private man, has naturally the further 
possibility of covering its need by incurring debts. But this is already 
for the private man a two-edged sword; for the state, however, it is, 
to express it in plain and good German, the stupidest thing that it can 
in general do. But it is not only the stupidest thing but it is downright 
criminal with respect to the mission of the state as the protector of the 
common interests. 

The loan economy of the states has virtually ruined the states and 
delivered them into the hands of international finance, it has delivered 
the wealth of the nations to the financial powers, and today the state 
loans are the frightful leech from which the nations are not able to free 
themselves and through which they will collapse helplessly if we do 
not determinedly put an end to this spectre through the breaking of 
interest slavery. 

With this we are in the middle of the field of national financial 


Gottfried Feder 

policy, thus in a field in which the normal German does not feel at 
home at all. What should one do now with all the many and large 
numbers? The normal state citizen does not in general read budget 
debates, and he has such a religious respect for the secret paths and 
misleading ways of the financial art that he would best like to be fully 
spared of these things. In the unconscious, this certainly is also related 
to the fact that every individual bears within himself such a slight 
feeling for the tax sovereignty of the state and nobody wishes to be 
reminded of numbers. Only when the tax papers fly into his house 
does the modern man remark that these things actually concern him 
considerably and that he is always the victim of every sort of false 
national financial policy. 

Now it is extremely remarkable that basically the matters of 
national financial policy are not at all so opaque and mysterious as 
they appear at first glance, indeed that they are basically so clear and 
simple that they can be grasped by every average understanding at 
least in their broad outlines. 

It therefore requires no great constitutional explanations that the 
state very well possesses the described possibilities to cover its money 
requirement, for everybody knows and has experienced in his own 
life what the nature of the service sovereignty of the state is, and 
everybody receives in his hand daily the paper notes issued by the 
state, and nobody is spared the tax. It would therefore be the most 
natural thing in the world if the state covered its money requirement 
exclusively in these three ways. 

For the private man however these three ways are not open, for 
neither could he call on his neighbour successfully to work- or tax 
service nor would he be secure if he attempted to print money on his 
own and bring it into circulation. For him there is indeed only the way 
of incurring debt on interest, if he already absolutely thinks that he 
is able to become happy only with others' monies and cannot avoid 
incurring debts. 

But that the state in general sees as right the sole means of accepting 
interest-bearing loans - thus debts, when it needs money and applies 
its other sovereign rights today only in an underhand manner to collect 
the incurred debts from the people, these are conditions for which 


The German State 

one seeks in vain for a reasonable explanation. There is indeed no 
reasonable explanation for it, but only the fact that our entire thought 
even in national financial political matters is directed or corrupted in 
a private capitalistic manner. With such a general pollution of public 
opinion, such apparently logical explanations for the loan policy of the 
state as I have reported play a great, indeed an all-important role. 

The Jew has proved himself to be a master of psychagogy even 
in these matters. It is, in such cases, always very hard not to speak 
at once generally of direct corruption of the responsible statesmen, 
the presumption is obvious, and yet in most cases there has been no 
corruption but only uncertainty in matters of the financial and credit 
system, short-sightedness and complacency that have led to the fact 
that the state financial administrations have fallen slowly but surely 
into a loan delirium from which they up to now see no exit. 

To this development of the circumstances has contributed in a very 
essential manner the fact that one at first considered the financing of 
large public works like railway building, etc., which promised to yield 
a revenue, through loans as harmless. One decided in the following 
manner: From the revenues of the railways or waterways the interest 
can be immediately covered, then we indeed have the pricing under 
control. With its own resources the state cannot draw such large works 
at one stroke from its treasury, so it thankfully accepts the offered 
credit help of the banks. This removes the trouble from the government 
of approving new taxes in the state parliament, the liquid resources of 
the state are not claimed, and the railways can easily pay the interests 
from the surpluses. The seductive arts of loan capital, which in itself 
can do nothing with money if it does not find anybody who takes it 
away from it and pays it interest in addition, succeeded in turning 
black into white and in making the state itself an interest collector for 
private capital. 

Even the simplest economic reflection on the part of a government 
or a parliament conscious of its responsibility however should have 
led to the following: If one builds the railways with foreign money and 
one must pay for it, year in year out, only 5% interest, with everything 
connected with it, one pays back in 20 years already the entire 
amount once, in 40 years already twice and yet the same debt remains 


Gottfried Feder 

outstanding. These extraordinary amounts which exceed many times 
the initial investment costs must indeed be raised once again indirectly 
from the people, the entire population, who must pay the railway 
transport tariffs raised precisely according to these interest amounts. 
A one-time announcement to the people of a large railway levy is, 
or would have been, better. Then these levies would, of course, have 
been rather oppressive for some years but also for not much longer, as 
the the transport costs and the railways would have very soon become 
a really debt-free asset of the state which would have later assured it 
large yearly revenues. But it is the old story that one would rather cut 
off the dog's tail bit by bit because one thinks it would be so much less 
painful for it. Naturally, the opposite is true. The investment costs of 
such a national undertaking must indeed be paid by the population, but 
if they are developed on loans, then there inevitably enter, in addition, 
the interests that amount in the course of the years to many times the 
debt itself. It is therefore a sheer financial stupidity to finance such 
public works through loans. Already here we may point to that which 
will rescue the state from its loan madness: nobody can forbid the 
state, for example for such productive undertakings, to issue credit 
notes, state treasury credit notes, and pay for the works thereby. Such a 
creation of money of the state in cases where there can be no question 
of an inflation at all, because there is a new value also for the new 
tokens, would resolve at one stroke all the difficulties and free the 
state and the people forever from the interest-bearing debt to private 

We shall have to go into greater detail into this problem in another 
place. A skilled financial administration should be able to arrange 
things in such a way that such large works are carried out from special 
taxes along with the use of other revenue sources of the state and only 
with a partial issue of new notes. This possibility would of course occur 
to a considerable extent only if all other state expenditures, especially 
the so-called unproductive ones for administration, administration of 
justice, education, etc., could be covered from the surpluses of the 
state's commercial enterprises. 

This may, in view of the present frantic deficit economy of the 
railways, post, etc., sound like an irony and yet we were not so far from 


The German State 

such possibilities, as I already showed in 1919 in my first publication 
in the Suddeutsche Monatshefte (February), "What now?" under the 
heading "The radical means". Only the interest obligation of the state 
to private capital separated us from this ideal condition of a national 
financial economy. The delusion already effective at that time, that the 
state, when it needs money, must simply pump money into itself at 
interest, has prevented this. 

It is clear, and everybody should have been able to follow my 
explanations, that the state is in no way directed to foreign money, 
thus to the incurring of debt, when it wishes to undertake something, 
that it, for example, could demand work- and team-service and that it 
finally would be doubtless justified in issuing state treasury credit notes 
for such goals, in order to institute these works with them without a 
burdening of the people. Such a procedure would have the enormous 
advantage of freeing such works from the start from every interest- 
and toll-obligation; the works would become immediately free and 
debt-free state property. From the revenues of the works the issued 
state treasury vouchers could indeed be redeemed and destroyed in a 
short time; the products of such works, or the freight- and passenger 
transport prices, could be reduced quite considerably. Thereby the 
greatest services could in general be rendered to the entire national 
economy, the state could have obtained quite significant revenue 
sources which would have been of the greatest use to the entire 
national community and would also have made the state itself quite 
independent of high finance. But it also should have been so. For the 
state is the master of the financial system and not high finance, that is, 
it will be so in the National Socialist state of the future. 

It has been really a psychagogic fraudulent trick that the banks 
have succeeded in not allowing such obvious and self-evident thought- 
processes which - once expressed - are no longer to be contradicted, 
and in befuddling the state and economy with the sentence cited above 
and roping them into the interest slavery to capital. 

I know that, even though these things are now clear as daylight, 
still many of my readers mistrust their healthy human understanding 
and simply do not wish to believe how such an absurdity could have 
been possible and would rather suppose: "That cannot be right, our 


Gottfried Feder 

statesmen cannot have been so stupid - but I just cannot judge this". 
This confession to a lack of judgement with regard to such a plain 
state incompetence in financial political matters stands doubly in 
contradiction to the otherwise ready fault-finding and ranting on state 
measures and to the fact that it is a question here of matters that hit 
every individual most keenly in his wallet 

To these people I would like to leave another viewpoint for 
consideration which is related to the method of credit approval through 
the provincial or Reich parliament. 

Such large state tasks are indeed deliberated thoroughly in the 
parliaments. After long debates the credits are finally "approved". The 
average state-citizen believes now that now everything is in order and 
that the state, which is indeed such a rich and powerful guy, already 
possesses the approved millions. Quite clever persons will perhaps still 
scratch behind their ear and say to themselves, 'That means new taxes 
again'. But I think I may boldly maintain that, apart from the initiated 
- to whom neither the representatives nor the ministers need to belong 
-, indeed perhaps only one at most becomes clear of the fact that this 
large credit approval in the provincial or Reich parliament signifies 
nothing but the permission to have this "credit" loaned to itself at 
interest in another way. This "credit approval through parliament" thus 
empowers only the concerned minister to get this credit at interest at 
the large banks. In this way the "credit approval through parliament" 
naturally becomes a farce, a comedy, for the entire population - which 
must in the final analysis pay for capital and interest - was not in a 
position also to really supply the "credit", no, it must first be created 
by large loan capital. 

The only logical and natural thing would indeed be that, in the 
case of a credit approval through the parliament, simultaneously and 
automatically there would also be an approval that now the state bank 
would also pay out or authorise the approved sums on the basis of 
payment orders from the implementing authorities to the concerned 

The credits are approved, for the necessary currency something 
must be done; it is therefore senseless if - as is now common - first a 
loan must be written out and then the just "approved" credits are in a 


The German State 

way given a second time by the capitalists. 

Now one may be able to maintain that surplus money from the 
state is drawn just in this way and that this must have a beneficial 
influence on the general financial situation of the country, that thus 
such a credit management will operate in an inflation-reducing manner. 
But this is naturally in no way the case and indeed for reasons that 
cannot be contested by any banking expert. It may be admitted that a 
quite smaller part of such drafts and payments of such loans is paid in 
cash, it is a question here of the circle of small savers who find their 
way to the bank with such drafts, who have saved a pair of hundred 
or thousand marks that they would now like to invest in an interest 
certificate, in such a magic paper from which one needs to cut out only 
a piece every year in order to be paid out a certain amount without the 
certificate becoming less valuable thereby. But the monies entering the 
bank in this way are quite negligible. In addition, the banks at which 
such monies are deposited for their part do not at all convey these cash 
amounts to the state treasury but the transfer of such draft amounts is 
conducted exclusively by way of transfer or clearance. 

But all larger drafts on such loans are conducted by the capitalists 
already from the start, in their banks, by way of transfer without cash 
or through the process of banking transactions, etc. 

In reality therefore no cash comes into the hands of the state and, 
if it receives such, it must immediately give it away for the execution 
of its works. This supposed advantage therefore does not exist. On 
the contrary this follows: The state, as we know, issues for loaned 
amounts so-called security certificates or bonds. These bonds of the 
state are finely, or not so finely, printed papers which contain a debt 
instrument endowed with all state safeguards on the received amounts, 
and in addition the necessary determinations of the interest payment 
dates and, on their own coupon-sheets, the coupons on the basis of 
which the state pledges to pay quarter-yearly, half-yearly or annually 
the interests for the amounts noted in the coupon-sheet. Besides, to 
this coupon-sheet is added another so-called renewal certificate (talon) 
which entitles the owner to the receipt of a new coupon-sheet if the 
first has expired after a certain number of years. 

Now such a security certificate that is issued by the state for which 


Gottfried Feder 

the state is liable with its entire wealth for capital and interest means 
certainly purchasing capacity in the hand of the owner. The owner of 
such state certificates can indeed buy something for himself with these 
certificates at any time, whether he gives these certificates directly as 
payment or he first sells these certificates at the stock-exchange or his 
banker and then pays cash with the proceeds. 

Now there is no doubt at all that the issue of new security certificates 
by the state means the creation of additional purchasing capacity — 
whether this is right or justified does not interest us here at the moment 
-, quite the same would occur if, for example, the state printed new 
paper money. The difference would consist in the fact that in one case 
security certificates are produced which burden the state, apart from 
the debt, with a lasting interest obligation, whereas in the case of the 
new issue of paper money an interest-obligation does not at all come 
into consideration. We see therefore already now that the last form in 
any case would be the more favourable for the state and the people. 

But now, if we follow the method of such financings further, it 
emerges that a direct financing of large state works with an avoidance 
of the loan route reveals further huge advantages. 

We have seen that the currently adopted form of the financing of 
state works leads to the creation of additional purchasing capacity, 
which is represented by the issue of new security certificates. In this 
case naturally the entire new loan amounts will and must be given out 
all at once, even if the railways, waterways, etc. to be built newly are 
only in a construction stage and still do not represent any real value 
worth mentioning. 

If one moves to financing such large state works in the way 
proposed by me, then the enormous advertising costs for the loan first 
disappear. One may remember what enormous amounts are devoured 
by the tenders in the newspapers alone. Further the percentages that 
are granted to the banks and other credit institutions from the start 
disappear. Even these are, again, millions. Further, one tends to issue 
the loans under the par value, in other words, for a 1000 mark bond 
only 970 marks more or less are to be paid by the purchaser of these 
certificates, and yet he receives the full amount with interest. Even 
these are losses that from the start become burdens to the state or the 


The German State 

enterprise and in favour of the capitalist. Indeed one tends "to decorate" 
such loans with other attractions, as the stock-exchange expression 
goes, by holding out in prospect special extra benefits which may even 
include a tax exemption. I recall here the mining premium loan that 
displayed the most fantastic of such attractions that a state ever stooped 
to. The lottery- and gambling devil was set in the service of the loan 
advertisement in that one promised to pay out winnings of millions 
on a very large number of 1000 mark bonds; besides, so-called bonus 
payments were held out, and further, an announced interest-rate at 
5% that was however hedged in with clauses, and, in addition, in the 
case of a series of taxes the savings premium loan was exempt from 
every tax! From where one wished to obtain the enormous amounts 
to pay these premiums and benefits, these fabulous lottery winnings, 
nobody considered - even though it had to be clear to every serious 
and perceptive man that all these amounts would have to be drawn out 
once again from the pockets of the people. For, the amounts received 
then were immediately used for the most urgent expenditures. These 
are all financial political crimes against the people in which one 
must only wonder at the consummate insolence with which they are 

If one therefore does not at all take the loan route, but directly the 
way of direct money creation, then all these hard and unjust burdens 
of the state budget would be removed - one would not even have 
to raise the necessary amounts all at once in new paper money but 
this could take place quite slowly, according as even the new works 
proceed. This would have the further enormous advantage that there 
could be no question of the issue of uncovered money, for new money 
will be given only when another considerable section of the works 
has been completed. We would have to do here with a money fully 
covered through real values, thus with a money that is stable, with a 
money that is matched by so many hours of performed work. But even 
this form of a successive issue of new money for construction which 
already appears much more favourable is not in any way the final step. 
For it will not at all be proved necessary to bring an amount of money 
equivalent to the newly created works into circulation, for the newly 
issued notes indeed flow back again into the public state treasuries; 


Gottfried Feder 

they can thus be issued once again without new series having to be 
brought into circulation. And now let us go a step further, that is, let us 
declare the issue of one's own new money for such special state tasks 
as being in itself fundamentally not at all necessary, even if we could 
very well explain the permissibility, and also especially the clarity, of 
the financing process in the issue of one's own money for construction 
and wished to adhere to it for certain purposes. 

This last step is the complete cashless financing of such state tasks. 
It is, as have already shown above, erroneous to assume that the state 
would, through the loan, come into cash with which it could pay the 
entrepreneur and workers of railway or electricity plant constructions. 
Nevertheless, the entrepreneurs will have to draw out weekly from 
their banks the necessary amounts for the payment of their work in 
cash. The banks for their part must cover these extraordinarily large 
demands on their treasury stocks once again from the central banks 
or the Reichsbank, etc. Now, in normal times, the entire existing 
liquidity already suffices fully for the weekly wage payments of the 
entire workforce, and it is fundamentally a matter of indifference if 
temporarily, for example, larger workforces are concentrated in one 
place in the construction of the Bavarian Walchensee power plant, for, 
if they were not employed there, they would even when distributed 
in other enterprises have to expect and receive their weekly wage 
payments, or receive money by means of unemployment insurance. 
That means that it is a quite general state task to take care of the total 
need of means of payment for the entire national economy, no matter 
whether greater workforces are temporarily employed in one place for 
the execution of large state works or not. 

The provision of means of payment for the wage payments and the 
implementation of the other cashless transfers to the entrepreneurs are 
tasks of payment transactions and have nothing at all to do causally 
with the credit situation. 

It would therefore be the most obvious and natural thing if with 
the credit approval for some large state work through the lawful 
representation of the entire population were bound, at the same time, 
the authorisation that the state bank may, on the basis of these approved 
credits, carry out the necessary payments. Obviously in the normal 


The German State 

way - that these payments are made only when the different contracted 
state authorities (agricultural departments, street and river engineering 
departments, railway construction sections, special departments for 
special purposes, etc.) have examined the payment amounts demanded 
by the entrepreneurs and, in accordance with the regulations and the 
contract, authorised payment. 

The entire loan swindle that is thrown in - for it is nothing but the 
modern form of cheating a nation - is completely useless and only 


Gottfried Feder 

The Reichsbank corporation 

The Reichsbank is not, as every credulous state-citizen may after 
all believe, really a state bank but a stock company. The Reichsbank 
is thus in no way a state institution even if the state had, up to June 
1922, when it was fully "autonomised" on the demands of the Entente, 
certain regulatory rights. Even the officials of the bank were named and 
paid by the Reich, but the advisory council was composed exclusively 
of representatives of the world of big banks and of international Jewry 
- the two are the same circle of people. 

Already in its foundation in 1 873 the first advisory council recorded 
among around 15 members the following names: Baron Rothschild, 
Privy Councillor of Commerce Bleichroder, Privy Councillor 
of Commerce Mendelssohn, Theodor Plaut, Privy Councillor of 
Commerce Oppenheimer, Privy Councillor of Commerce Warschauer 
and Privy Councillor of Commerce Zwicker, Councillor of Commerce 
Stern, Councillor of Commerce Gelpke; so eleven pure-bred big Jews 
and, as decoration, four more gentlemen with German names. 

It was again a clever chess-move with which the banker advising 
Bismarck, Bleichroder, recommended to the old Reichschancellor that 
the Reichsbank be developed not as a pure state institution because 
thereby it would not be able to be appropriated by the enemy in case 
of war on the basis of the international! recognised security of private 
property, whereas as a pure state bank it would stand immediately 
open to the attack of the enemy. 

In reality, the clever Jew, along with the other big financiers, 
naturally wished only to get the principal financial institute of the 
Reich into his sphere of power. The gentlemen succeeded in this too 
and the Reich therewith totally renounced one of the most important 
fields of its coinage sovereignty - its right of issuing banknotes. 

The Reichsbank occupies today a quite special position in the 
financial system of the German Reich, a position about which the 
least important people are clear even today regarding its frightful 
consequences for the state and the people. 

It must be the task of an individual investigation to precisely 


The German State 

examine in what way the big banks have misused their decisive 
influence on the Reichsbank, since its foundation, to their egoistic 

So long as Bismarck was in office his statesmanly view and the 
respect for him kept the stock-exchange hyenas under control; only 
once in the entire history of the Reichsbank did Bismarck make use of 
the chancellor's veto provided for in the Reichsbank law, namely when 
he forbade the acceptance of Russian stocks. Today the Reichsbank 
has, under the friendly pressure of the international bankers, as 
already mentioned at the start, been made fully independent. The 
Reichsgovernment thus has no further possibility of acting in a decisive 
way on the conduct of the business. 

The interest slavery of the nations means the rule of the bank 
and stock-exchange. The breaking of interest slavery is by far the 
greatest task of National Socialism. 

Everything that happens today in the state and economy - everything 
becomes a demand for interest of large capital against productive 
work. If a railway is built, there results a loan therefrom, if a war is 
conducted, war loans result therefrom, if natural resources or hydro- 
energy are developed, there result hydro-energy loans therefrom, if 
a factory is expanded, new shares are issued, if a new enterprise is 
founded, some interest capitalistic company form is chosen that allows 
the work and the risk to flow to the entrepreneurs and the lion's share 
of the profits to the financiers. If it does not proceed any more by way 
of loans, the far simpler and more extensive way of money-printing is 
chosen, as in the time of the inflation of 1923, which likewise gathers 
in the greatest interests for large capital. As in the case of King Midas 
in the saga, for whom everything that he touched turned into gold, so 
today everything that happens turns into interest-bearing securities. 

Unfortunately the world-bankers have a damned good appetite 
and securities are indeed their favourite food, which obviously suits 
them excellently. We cannot count on their going hungry, like King 
Midas, for whom, as is well-known, even the food in his mouth turned 
to gold. On the contrary, the workers will first go hungry before the 
interest lords will. 

They also do not at all think of giving up or softening their rule, so 


Gottfried Feder 

this interest rule must be broken. 

Now we have to illuminate a third aspect that will complete and 
round off the picture of the interest capitalistic exploitation even for 
the layman, that is inflation. 


The German State 


Inflation is the clearly visible expression of our financial political 
misery. Inflation affects everybody - everybody who must earn his 
livelihood - with frightful severity. 

But from whence does inflation come? To this question one can 
hear a large number of explanations which are partly taken from the 
narrow viewpoint of the person answering, partly from the dictionary 
of demagogic slogans, and partly indicate actual partial causes without 
however correctly hitting the ultimate motivating cause. When one 
hears these causes of inflation identified by the different parties, there 
is soon no social order and no profession any more that would not be 
designated by some side as the cause of inflation. 

For those who have followed the explanations of the book on 
interest slavery 86 the answer is not hard to find. The original guilt for 
inflation is borne by the interest obligation of work to capital. 

Interest - tax - inflation, thus does the logical chain run which, 
starting from the disastrous and absurd promise of interest on the part 
of the state, forces the consequence that the state must extract the 
accepted interest obligations from the people through taxes; the taxes, 
and indeed taxes of all kinds, direct and indirect, duties, as well as the 
most objectionable indirect taxes, those of the uncovered banknote 
issue, then drag in inflation along with them. In this way it continues 
in an eternal cycle, for the inflation conditions ever greater expenses 
of the state which it, trapped in the loan madness, always thinks that it 
can cover only through the acceptance of new debts, these new debts 
bear new interests in themselves, the new interests make new taxes 
necessary, the tax legislation gradually fails completely, for, in the case 
of such currency collapses, all the tax revenues remain far behind the 
currency devaluation and now the state surrenders without resistance 
to the financial Bolshevism of the money printing press, as we have 

86. [Feder 's Manifest zur Brechung der Zinsknechtschaft des Geldes was first published in 1919. 
See my translation of this work, Manifesto for the breaking of the financial slavery to interest, 
Carshalton, Surrrey: Historical Review Press, 2012.] 


Gottfried Feder 

horribly experienced in the inflation of 1923. 

My first polemical works were primarily dedicated to the uncovering 
of these connections. In the Manifesto for the breaking of interest 
slavery^ I developed in broad outlines generally the all-overarching 
significance of the interest problem, in the State bankruptcy: The 
solution I quite specifically revealed the stupidity of the state loan 
system and pointed to the innumerable tax laws which made more 
expensive the livelihood of the broad masses, whose productions had 
to be used completely for the interest service. In the work The coming 
tax strike, with the new flood of tax laws from 1920 and 1921, as well 
the Reichsbudget for 1918, the conclusive proof was offered that the 
entire financial administration of the Reich and the states is completely 
yoked to the interest service for large loan capital. In the last book, 
however, the way is already indicated to a reversal of these completely 
squalid circumstances with a quite palpable example. 

It is quite obvious that, through the flooding of a national economy 
with paper money, the purchasing power of this paper money must 
steadily go down. 

Since money in its innermost character, as we have recognised, is 
a token of performed work, the so-called quantity theory of money, at 
least in its essential features, must be acknowledged by us. This theory 
teaches that the amount of money found in circulation in a national 
economy must remain in a certain stable relationship if changes in 
purchasing power are not to emerge. The money stands to a certain 
extent against stocks of goods and - calculated from the amount of 
goods - a certain number of units of value of the customary currency 
is produced, that is, the average price of the goods. Here I stress 
very strongly the adjective 'average'. Indeed, one must go farther 
and say: the average price level - thus in no way the amount of the 

87. Potential purchasing power is the saved purchasing power that does not at the moment weigh 
on the market. To this belongs hoarded cash as well the firmly invested savings capital. 

Effective purchasing power is the total amount of all demand claims on the national economy 
which in the form of cash or in the form of securities are applied to the goods market and seek to 
transform themselves into material goods. 

Potential purchasing power can be transformed at any time into effective, in the case of this 
phenomenon one speaks of the "flight from the mark". 


The German State 

individual prices - stands in a certain dependency on the amount of 
the purchasing power present in total in the country. But purchasing 
power is already a much more comprehensive concept than only the 
amount of cash assets. But we do not wish to get lost here very much in 
economic details, for otherwise the question of effective and potential 
purchasing power in its effect on the prices must be broached here. 86 
Anyway it is certain that, for example, a multiplication thousand times 
of the circulating currency must naturally bring with it a multiplication 
roughly thousand times of the prices. In reality it is not the prices 
that have really risen, the purchasing power of the mark has just 
diminished in inverse relation to the multiplication of the amount of 
the currency. 

The basic cause of inflation is - the interest obligation of the state. 
This interest obligation makes taxes necessary, for the state can only 
give what it must again extract in some form from its citizens. 

This form of robbery of its citizens by the state is, as we have seen, 
a threefold one - either through direct taxes or in more effective form 
through indirect taxes or in the special indirect form of inflation. The 
last form is the most objectionable, it is also that with which bankrupt 
states seek to hold their head above water - it is the most perfect 
counterfeiting. But this last form is especially so harmful because 
thereby the savings wealth of the most efficient and industrious part of 
the population is simply destroyed. 

This is one of the most shocking chapters in the tragedy of the 
German people. Hundred thousands of industrious manual labourers, 
employees, officials, members of free professions, doctors, engineers, 
etc. have all their life long, through tenacious tireless work, saved for 
themselves and for their families so that they could enjoy an old age 
free of care and independent. They have collected their savings penny 
by penny and mark by mark, and every mark means the guarantee of 
the subsistence minimum for every day in old age. But the state, to 
which these unfortunate people have entrusted their savings, did not, 
in the inflation of 1923, pay in any way for a mark which had been 
entrusted to it in some way as savings - even not when these saved 
pennies had been deposited at that time in shiny gold pieces 


Gottfried Feder 

- about 30 million papiermarks, 88 but it availed itself of the decline 
of the currency caused by itself and said: a mark = a mark. Therewith 
it robbed all these men of the fruits of their lifelong work and pushed 
them into the most bitter distress. They were then fobbed off by the 
state with pathetic and miserable handouts, private charity had to step 
in with help - but precisely this form was especially shameful for 
those affected, for from the private hands these gifts remained actual 
handouts, charitable gifts for which these unfortunate people had to 
be thankful, even though it was a matter of organised robbery of well 
earned rights. Of rights which, if they were restored, would not even 
make a "thanks" from the robbed necessary. 

We have already pointed in other passages to the fact that a false 
principle avenged itself frightfully on these poor people - indeed the 
ideal of capital pension. Not as if these circles had deserved this fate, 
on the contrary - it will be an honourable duty of the National State to 
compensate these robbed people as well as possible. Yet, it remains to 
be hoped that this frightful lesson will nevertheless continue to vibrate 
in the unconscious of the people and that the capital pension ideal will 
sink and will help the right savings ideal - the purely German idea 
of old age care, care of women and children through the creation of 
a home of their own, field and garden, etc. - to a breakthrough and 

The second form of robbery of the citizens by the state mentioned 
above is the indirect tax. Indirect tax is, in its consequences, indeed 
a social crime. Ruthlessly and relentlessly, in a form that nobody 
can avoid, it hits the great mass of the population with total severity, 
whereas the rich are in general hardly touched by the indirect taxes. 

The direct tax is, if it is graded according to the economic 
performance capacity of the tax-payer, in itself a just and right tax. A 
direct tax is also, as a contributory payment to the state for communal 
tasks, in no way a tax which must essentially make the production 
more expensive, for it should be taken only where actual surpluses 

88. [The papiermark was established in August 1 914 on account of the fall of the mark, and the 
connection between the goldmark and gold was abandoned. The rate of inflation continued to 
rise until November 1923, when the currency was stabilised through the announcement of the 
creation of a new rentenmark valued at 1 trillion papiermarks. The rentenmark, which came into 
effect in 1924, was itself replaced later in the same year by the Reichsmark.] 


The German State 

beyond the coverage of the adequate life-necessities are present. But as 
direct tax is treated today, it, like inflation, amounts to a sheer robbery 
and places itself in direct contradiction to the guarantee of property 
expressed in Art. 153 of the Weimar constitution. 

In summary, let it be once again pointed out that we have to do 
here with an inflation which operates generally as a consequence of 
the interest obligation of the state to international finance. It is a matter 
here of a lasting blood-sucking from the economic body of our nation 
in favour of the supranational financial power for which our own state 
acts as a tax-collector. 

It is a matter here of a quite special form of inflation - the interest 
capitalistic inflation. Natural inflation arises when insufficient harvest 
or an epidemic hits the country, when the natural demands are greater 
than the existing supply. Such an inflation is however always only of 
a temporary nature. The next fertile year removes the distress and the 
prices return to their natural level. 

The interest capitalistic inflation however is like a devouring fire 
which is not extinguished until it has consumed all the treasures of the 
world and made the whole of mankind interest-slaves of international 
finance - or until the interest slavery is broken. 


Gottfried Feder 

National financial reform 

After such a thorough diagnosis of the illness of our state finances, 
as of our financial system in general, we may hope to be able to give 
the right prescriptions for the remedy. 

Those regulations and measures that regulate the transition from 
the present situation to the future form do not belong within the scope 
of this work. For these measures is valid the general guideline that 
through these where possible every disturbance of the economic life 
must be avoided. Naturally it will not happen without a certain severity 
here and there and without temporary interventions but, even in the 
case of a most carefully prepared operation, it does not happen without 
a certain small loss of blood. 

Our great shining final goal is the breaking of the interest slavery. 

The first and fundamental measure, which results from the 
surrender of the national financial system to a private institution, the 
Reichsbank, pic, is the nationalisation of the Reichsbank. 

It must already be quite obvious from the scope of this bank that 
a "Reichsbank" has indeed to be an institution of the Reich, just as 
the Reichspost or the Reichscourt. It must be absolutely declared as 
a misleading of public opinion that the Reichsbank, pic, is allowed to 
bear this name. 

The task of a real Reichsbank must correspondingly be a two- 
fold one. First, the provision of financial businesses of the Reich 
must lie with it, insofar as these cannot be provided for by individual 
administrative positions themselves and directly, as this is indeed 
the case with the post and the railways, and, secondly, it must form 
the strong backing for the entire national economy in the fiduciary 
mediation of payment transactions. Its task must, further, be to see 
to it that constantly sufficient cash assets are present for monetary 
transactions. For this range of tasks it must be the executive organ 
of the national financial administration, which must be placed fully 
under it. The officials of the Reichsbank must be state officials, like 
the other officials as well. An advisory council, which is constituted of 
representatives of big Jewry, as that of today, is naturally completely 


The German State 

superfluous. It is indeed sufficient if a special state commissioner 
for the supervision of the financial conduct of the bank, who is 
responsible for the financial conduct of the bank, is appointed by the 
state. The tasks of the bank will be precisely circumscribed by its own 
Reichsbank law so that already the financial conduct of the bank would 
provide a guarantee that the institution of the Reichsbank serves only 
the national interests. 

But we have now already a banking institution which corresponds 
completely to these demands that we must place upon the Reichsbank. 
This is the Bavarian State Bank. The Bavarian State Bank is actually 
a purely national bank, and nobody will be able to maintain that it has 
not fulfilled its tasks as a banking institution in an unobjectionable 
way. This naturally with the caveat that it has likewise worked 
according to the general customs of the interest capitalistic economy. 
But in any case this bank has served the monetary transactions without 
considering profitability for the bank capital as the first task. It has 
thereby manifested the following very remarkable phenomenon that 
the bank, with its own extremely small capital of only 8,000,000 
marks, was very well in a position to serve all the demands of monetary 
transactions and to manage revenues of billions. 

It is not uninteresting to state that, in the Stock-exchange Yearbook 
(Saling's Stock-exchange Yearbook, A Handbook for capitalists 
and stockholders, for 1914/15, presented by the German Bank), the 
existence of this Bavarian State Bank (at that time still "Royal Bavarian 
Bank") is simply ignored, even though there were opportunity and 
place to mention it on page 644 of this handbook of this nevertheless 
significant state institution. But a bank which does not exclusively 
serve private capitalistic aims is clearly, for high finance, not a bank. 

It is further remarkable that, immediately after the war and the 
Munich Bolshevist period, efforts were under way to place the Bavarian 
State Bank "on a broader basis", as the delightful stock-exchange 
technical expression for it ran, in order to make even this independent 
institution available for the "making profitable" of private capital. Our 
demand thus has a practically preserved model in the Bavarian State 
Bank. The objection that it is not possible to conduct a bank as a state 
institution is thereby refuted. 


Gottfried Feeler 

For the Reichsbank itself, the Reichsbank law in fact proposed a 
nationalisation according to which the Reich would have the right, 
after a year's notice, for the first time on 1.1.1891, then in periods of 
ten years, either to abolish the Reichsbank and to acquire the assets 
of the same (including the enormously valuable buildings) against a 
payment of the net asset value (!) or to acquire all the shares at face 
value (!!). On 1 January 1921 thus the Reich would have been able 
to make good a serious mistake of the Reichslegislation against the 
German people if it acquired the entire property of the Reichsbank 
for the trifle of 1 80 million - that is the face value of the Reichsbank 

The Volkische Beobachter^ 9 which was at that time not yet in the 
possession of the National Socialist German Workers' Party, which 
however was at that time already led by men who belonged to the 
intellectual precursors of National Socialism, and the weekly of Dr. 
Sch. Pudor, Der deutsche Finanzmann, 90 pointed this out in time - 
of course as the only public German newspaper voices - naturally 
without any success. 

It is further remarkable that, although the Reichsbank shares are 
made out to names, not less than 2 1 53 foreigners were in the possession 
of Reichsbank shares! What part of the entire capital of the Reichsbank 
these 2153 foreigners (as of 1913) disposed of is unfortunately not 
apparent from the Reichsbank disclosures. In any case, it is a matter of 
a very considerable percentage after the number of local share-holders 
is given at only 16,646. Now it is clear that, in the case of the local 
share-holders, very much smaller amounts may have been acquired, 
whereas naturally it may be rightly assumed that a foreigner, when 
he buys German Reichsbank shares, does not acquire only one or two 
pieces, but straightaway a neat package. This fact hides the incredible 
situation that quite significant sums were drawn away in the form of 
dividends, even during the war, from the "German Reichsbank" to 
foreign countries. 

Now, the profit sharing of the Reichsbank, which derives its main 
profits from bill discounting - as we have learnt above - is a most 

89. [See above p. 5n] 

90. [See above p. v] 


The German State 

highly original one. First, the share-holders receive a preference 
dividend of 31/2 %, and from the remaining profit then a quarter is 
distributed to the share-holders. Three-fourths of this remaining profit 
are transferred to the Reich, after a further 10% is transferred to a 
reserve fund. In 1913, 31,025,555 marks were transferred in this way 
to the Reich. For that reason the Reich has conferred on this remarkable 
institution the so-called bank-note printing privilege, that is, the right 
to issue bank-notes according to the need of its transactions. Up to 
the breakout of the war, the Reichsbank was at least supposed to keep 
ready, as a cover for these bank-notes, up to a third of gold or silver 
in German or foreign coins or in bars. After even this restriction fell, 
there stood no more obstacle in the way of the limitless paper money 
printing. The only coverage (!) which the Reichsbank had for its paper 
money was the wonderful Reichstreasury bills - thus once again 
only another paper, behind which stood a bankrupt state. No wonder 
if, amidst such conditions, an unstoppable collapse of the German 
currency had to occur. 

It is doubtless a quite important state task for a nationalised bank to 
always take care that the claims of the economy for means of payment 
are fully satisfied; for only if no deadlocks occur here, even if the other 
financial institutions can satisfy all claims fully, is an interest extortion 
on the basis of money shortage - which can rise to the greatest world 
crises - excluded. Conversely, the issued amounts of money flow back, 
even in times of a lesser buoyancy of the economy, to the Reichsbank 
through the innumerable channels of public money transactions so 
that it can draw the notes again from the circulation. In the case of the 
Bank of England, it is customary, as is well-known, that a note which 
flows back to the bank is not given out again but is exchanged for a 
new one while the old one is destroyed. This happens primarily for 
hygienic reasons. 

Now the question of the currency will in the future indeed be 
of increasing significance after the so-called money surrogates, like 
bills of exchange and cheques, and especially the cashless money 
transactions, gain increasing importance. 

In such a clearing economy, the postal cheque offices, which already 
today are exemplary for pure monetary transactions on a cashless and 


Gottfried Feder 

interest-free basis, will gain extraordinarily in significance. In the 
present-day postal cheque offices are to be glimpsed the core cells that 
are easily to be developed for an ideal monetary transaction system 
under state supervision - completely corresponding to the national 
passenger- and goods transport. 

N obody can contest that the payment transactions through the postal 
cheque offices are handled more quickly and reliably. It hardly matters 
that credit- and debit notes are not dealt with within 48 hours at most, 
when, on the other hand, one can experience with the banks today that 
credit notes for amounts long received are produced only 8 to 14 days 
later. If the bank customer needs money for his enterprise, he is still 
forced to claim bank credit. In the case of the monetary transaction 
through the postal cheque offices the entire interest calculation is 
removed. This means a quite enormous relief and simplification of 
the payment transaction and especially at the end-of-year deadlines. 
The postal cheque customer receives on 2 January every year - as also 
every day on demand - the exact information on the condition of his 
account in the postal cheque account. 

The mediation of the monetary transaction through the banks is 
thus in no way especially advantageous for the economy. The pure 
monetary transaction through the banks burdens the production only 
with provisions of all sorts, and only and exclusively the banks have a 
benefit from the interests but never the one who makes use of the bank. 
For the just factory owner and entrepreneur the receipt of a couple 
of marks interest for temporary credits is not at all important. A just 
entrepreneur directs himself in such a way that he has disposable in 
the bank only so much money that he can defray the wages and other 
current payments therefrom. 

The postal cheque accounts correspond to these demands 
completely and it is not by chance that, even during the war, the 
English society of "Fabians", the "Fabian Society", 91 in London 
directed a memorandum to the Lord Chancellor of the Exchequer with 

91 [The Fabian Society is a democratic socialist organisation that favours reform rather than 
revolution. It was founded in 1884 and its early members included George Bernard Shaw, H.G. 
Wells. Annie Besant, Leonard and Virginia Woolf, though the most significant of these were 
Sidney and Beatrice Webb. It was Sidney Webb indeed who composed the constitution of the 
nascent Labour Party in 1900.] 


The German State 

the title: "How do we pay for the war?", in which they pointed to the 
organisation of the German and Austrian postal cheque accounts as a 
support. Enemies are always sharp-sighted and when they indicate an 
institution for their own country as exemplary then one can be certain 
that there is something in it. 

The same thing that was said about the nationalisation of the 
Reichsbank is true naturally also of the nationalisation of the other 
central banks, for Bavaria, thus, of the "Bavarian Central Bank". The 
Bavarian Central Bank is likewise a pure stock company, in which 
a majority of the share-holders, for example, can simply decide 
to distribute the gold reserves of the bank, on which the bank's 
privilege of issuing notes lies, to the share-holders. Indeed we still 
remember that attempts in this direction were made by the Jewish 
banker SchweiBheimer in Munich. This time the plan foundered on 
the objection of the Bavarian government. The Bavarian state had 
acquired at that time a sixth of the shares while a further sixth had 
been acquired by the Bavarian Mortgage and Discount Bank and the 
remaining two thirds were given out to the share-holders. 

It is in itself absolutely monstrous that a state must fear that the 
gold stock of the central bank could be endangered by the intervention 
of the "share-holders" of this bank. One who knows the Jewish tenacity 
knows that the danger for Bavaria for its gold stock was nowhere 
near removed by the fact that the government for once remained 
firm. Against this there is indeed only the one radical means of the 
nationalisation of the central banks. Apart from the Bavarian Central 
Bank, we have in Germany also the Baden Bank, the Saxon Bank in 
Dresden and the Wurttemberg Central Bank. 

In the case of the nationalisation of the Reichsbank and the central 
banks, the officials and employees of the banks will obviously be 
taken over in the same capacity by the state as state servants. The right 
to issue notes will thereby be exercised exclusively by the state. Such 
an issue of notes can occur only after an ordinance of the Ministry of 
Finance and only against complete coverage. Here in this connection 
is to be resol ved the great task of the stabilisation of our currency. 
This is however not a task within the smaller circle of central banks; 
they only have to take care that no issue of notes takes place without 


Gottfried Feder 


For the production of notes the determinations up to now are valid. 
Every imitation will be punished with the greatest strictness according 
to the prescriptions of the penal code, Section VIII, Arts. 146-1 52. 

The shareholders will be compensated. Any claim to the gold 
stocks of the bank on the part of the share-holders will be legally 

A real stabilisation of our currency is fully excluded so long as 
one expects, in the way described, interest and duty charges of the 
German people that cannot in the long run be fulfilled. It is also false 
to want to maintain a radical means for a stabilisation of the currency. 
It is a matter here not of a special problem that one could separate 
from the international problem of the interest economy. So long as this 
international robber economy of the all- Jewish high finance continues 
to exist, the currencies of the different nations will always remain the 
welcome object of speculation of high finance. Further, the stability of 
a currency - thus that which the inner meaning of the term "currency" 
expresses - depends on other factors, above all on the activity or 
passivity of the balance of trade. Here our glance is extended beyond 
the limits of our fatherland, and the home economy enters into mutual 
relations with the national economies of foreign countries. 

In order to quickly find one's bearings in this enormous field 
of international finance we must likewise have in mind once again 
that the meaning and goal of this international economy is not the 
profitability for private capital, but the covering of need. Everything 
else is only an accessory, an aid. The international financial economy 
- the international payment transactions - is however today that which 
appears as the principal thing and which today actually plays the 
chief role. It is the international banking houses that today actually 
rule the world, which "cover" the monetary need of the states, and 
have therefore arrogated the rule to themselves; it is the international 
banking houses that today control production in gigantic trusts, 
iron, steel, petroleum, canned food, grain, fat, oil, cotton, etc. The 
international banking houses financed the wars, the large banking 
houses financed and controlled all war provisions. They themselves 
have performed nothing as productive men, neither have they taken part 


The German State 

in the production, nor indeed participated actively in the war activities; 
they have only derived profit from every single thing, from blood and 
tears, from the horrors of the war, from the hunger of the masses, 
from the wastefulness of the nouveaux riches, from the speculative 
fury of the stock-exchange public. All that becomes gold and gold 
value to international finance. Every work of the productive nations 
brings interest to international finance. Even here, in the international 
economy, we have to do with a complete reversal of the correct and 
reasonable relationship between capital and work. 

The workers work reasonably and offer their work products on the 
world market - in order to exchange them for foreign work products 
(raw products, semi- or fully fabricated). A reasonable economy is 
not appointed to exchange foreign currencies (dollar or English pound 
notes) for supplied optical instruments and to then cancel these and 
then speculate further in foreign currencies. In times of a healthy 
economy no factory owner would have thought of such a thing. He of 
course needs the proceeds for his further products, in order to be able 
to produce further, to pay his workers and to buy new raw materials. It 
is fully impossible that the entire German economy should collect its 
proceeds from its export of industrial products in the form of foreign 
currencies or in foreign exchange, for the same German total national 
economy must buy its raw material needs in cotton for the enormous 
textile industry, in copper for our likewise gigantic electrical industry, 
in silk, jute, tropical fruits, the increased demand, above the home 
production, in food and fodder, etc., to name just a few. The received 
amounts of foreign monies therefore have to be immediately disbursed 
again. This is also in itself quite natural, for in normal times one cannot 
do anything with foreign currencies in one's own country except 
exchange them. This is so even today. The American worker cannot be 
paid with French francs, and the English businessman is not paid in his 
shops with Italian liras. There is also no sense in taking the currencies 
to foreign countries where they cannot at all be used as legal means of 
payment. The local currency serves and should only serve the internal 
needs of the country that issues the currency. Just as, within a national 
economy, the meaning of goods production does not lie in trading in 
money and in then sitting on the money as it were and in withholding 


Gottfried Feder 

it from the economy, so too the international economic exchange of 
goods is completed only when import is paid for with export. 

The theoretical ideal-situation would be now that every country 
could cover and pay for its import need exactly with its export. 
Then, and only then, can one speak of an absolute stability of foreign 
currencies. Now the effort of every upward striving national economy 
understandably is directed at achieving an export surplus over the 
import need. Only this indicates increase of wealth. Then one speaks of 
an active balance of trade. If the import need remains over the export, 
elements of the internal wealth must be delivered to foreign countries 
for the balancing of this deficit. But these deliveries must, since they 
cannot indeed be extracted from the work income, once again be taken 
only from the wealth. This occurs either through the export of gold or 
of securities. Especially the last "export" however is nothing but the 
beginning of the international interest slavery. Whether this "export 
of securities" extends to existing internal securities or is disguised in 
the form of foreign "bonds" is practically a matter of indifference for 
the nations affected by it. But since also, in the international economic 
thinking, only the profitability madness of large loan capital rules, all 
reasonable doubts of an honourable national economy are trampled 
down by means of the press and the parliaments, and the international 
slavery of all nations to the international finance making this bond 
spreads to a frightful scope. 

Even here in the international economy there are manifested the 
same phenomena as in the internal national economy and the frightful 
crises which shake the different national economies today are in the 
main a resulting phenomenon of this enslavement of all the nations of 
the western cultural circle, as we have already learnt above. The weak 
currency countries, whose internal economy has become too weak 
(Russia) or whose internal situation has become uncertain through 
revolution (Germany) and whose still gigantic production surpluses 
are confiscated free of cost as reparations from the enemy, have no 
more surplus purchasing power, they can therefore no longer pay 
for their import need with goods but with paper money which they 
throw in large quantities into foreign countries in order to buy foreign 
currency therewith. Thereby they harm in a similar way both the 


The German State 

internal economy and also the foreign economies. The strong currency 
countries, on the other hand, choke precisely on the elevation of their 
currencies (Switzerland, for example). They can no longer export their 
products to the earlier large markets because their products are too 
expensive on account of the high exchange value of their money. These 
countries can cover their import need easily with their strong currency. 
But when the finished products are much cheaper in the countries 
with bad currency, the traders and profiteers go to the weak currency 
countries and buy out and rob these countries to the disadvantage 
of both countries - the disadvantage of the local production and the 
disadvantage of the consumption in the countries that are bought out, 
in which the already small inventory level of goods is reduced even 
further by these wild purchases. Thereby the purchasing power of the 
national currency in the weak currency countries once again sinks. 

That, in view of these fully topsy-turvy relations, everything has 
not already long ago collapsed is due to the fact that, even above all 
the machinations of international finance, the mutual international 
need simply prevails. Only, everything happens at the last moment, 
with groaning and moaning, because the spanner - the interest 
demands of international capital - has been thrown into the works of 
the international economy. Or, expressed in medical imagery: In the 
healthy blood circulation of the international economy a, at first small, 
but today already enormously large, carcinoma has set in which has 
only a one-sided interest of sucking up all the blood into itself at the 
cost of the rest of the body and to take a transit toll, an interest, from 
everything. All the blood of course flows into the heart, but the heart 
gives out also with each beat the contaminated blood. The state bank 
which serves only the pure monetary transaction corresponds precisely 
to this image - and to the carcinoma corresponds most precisely the 
activity of international finance, which also controls all the money of 
the world through its credit banks and holds the entire international 
economy gripped in its suction arms and takes interest everywhere. 
All this is not necessary! The nations of the world do not in any 
way need supranational financial powers. Obviously institutions are 
necessary which internationally regulate the international monetary 
transactions in the sense of a clearing house or in the sense of the 


Gottfried Feder 

postal cheque accounts. That can and will be taken care of by state-run 
foreign exchange offices. 

In any case there are enough ways and means, quite similar to 
how it was possible to create an international postal union, to organise 
even the international payment transactions mainly through clearing, 
without the international finance benefiting two or three times in all 
these simple mercantile operations and becoming big and fat at the 
cost of the productive nations. Details are superfluous here. 

The stabilisation of a currency cannot therefore, as emphasised, be 
separated from the inter-national relations. There is however a series of 
possibilities of removing the sources of error and the irresponsibilities 
that lie in the deficiencies of the internal administration or in the 
unrestricted manipulation of the note printing press. 

The proposed measures all lie within the field of already tested 
systems; like the nationalisation of the Reichsbank and the central 
banks, they arise simply as the logical consequences of a new 
position of the state towards its tasks as the protector of the monetary 
transactions. They only represent the natural reaction to conditions 
that served merely and solely the interest of high finance at the greatest 
cost of the people. The sensible extension of the nationalisation of the 
Reichsbank is the regulation and mediation of the monetary transaction 
by the state according to the model of the postal cheque system, which 
will be further extended and more appropriately developed for this 

All these measures indeed signify already quite powerful steps 
forwards, but they could be carried out also without the economic 
attitude having to be already basically transformed in the sense of the 
National Socialist principle presented with all emphasis: "The task of 
the economy is the covering of need and not the profitability of private 

This fundamental transformation and new ordering in the field of 
the financial and tax system, as well especially in the financing of large 
state tasks with an avoidance of the loan route, as well as the financial 
political measures which indeed come close to the scope of functions 
of the field of social policy, will occupy us in the next chapter. 


The German State 

New ways 

The financing of large public works. 

Among the most important state tasks is the execution of quite 
large economic undertakings whose execution exceeds the capital 
resources of private entrepreneurial circles, in whose execution 
moreover considerable public-legal interests are concerned and whose 
execution is based on the exploitation of natural resources or natural 
energy sources. Tasks, therefore, in which the exploitation of natural 
forces which belong to the community is at issue, or whose execution 
has to occur within the range of the tasks that are mainly incumbent on 
the state, like the entire field of transport. 

One sees that it is completely possible to limit the field rather 
precisely on which state initiative can be developed without limits 
being drawn thereby for the private entrepreneurial initiative or the 
state having to exert a competition to it. In addition there is, beyond 
this, the fact that the execution of these large public works is naturally 
assigned almost totally to private enterprises. 

We have already described in detail in the fundamental observations 
in what an exemplary way the state has built up our German transport 
system. Certainly here and there it would have been more rationally 
and cheaply developed by private enterprise but, in the case of tasks 
in which the security of millions of men is at stake, it is not so much a 
question of that as of the greatest possible solidity. Now, the transport 
enterprise is definitely a purely state task. Reliability, punctuality, 
security, uniform tariffs for railways and post must be the decisive 
viewpoints for the transport system - and not - the profitability of 
private capital. 

But this question is closely connected to the form of the financing 
of such large public tasks. 

We have already seen the internal nonsense that is revealed in the 
fact that the "credits" approved by the parliament must be "approved" 
afterwards again by private capital, for which the state then has to 
take upon itself a quite extraordinary burden through the promise 


Gottfried Feder 

of interest. It will no longer be necessary here to point in a general 
way to the disastrous consequences of this promise of interest. The 
present work indeed serves mainly to prove this fact. Nevertheless, 
let a special reference be made here also to how extraordinarily more 
expensive, and in what an unbelievable way for everybody who hears 
these figures for the first time, this promise of interest on the state 
loans has made the railway tariffs, for instance. 

The capital costs for the entire network of the German 
Reichsrailways, which were built or undertaken through loans, 
amounted to around 25 billion gold marks up to 1914. The interest 
payments for this amount, with an average interest of 31/2 - 4%, 
amounted to around 800-900 million gold marks. The net revenues, 
after the deduction of the costs for personal (officials and employees) 
and material (coal and lubricants) expenses, amounted to around 800- 
1 100 million marks. 

The interest payment thus consumed almost the entire net revenue 
of the German railways. It was always a misleading of the public 
opinion when it was explained with a certain pride that the revenues 
from the post and railways formed the backbone of the state budget. 
Of course it could have been that, if only the interest payment had not 
consumed the entire net revenues. Another interesting parallel can be 
drawn in comparison, that is, that the total expenditures for wages and 
salaries to all the German railway officials and employees and to the 
railway workers in the plants, and on the line, taken together amounted 
to precisely only as much as this interest charge on loan capital did! In 
other words: the gigantic army of German railway workers up to the 
highest positions with a head count of 782,73 1 persons has received 
for its work only exactly as much income as the completely inactive 
hand of loan capital has pocketed. 

This interest payment to loan capital just from the railways was 
greater than the entire expenditures for our entire large Reichsarmy of 
that time! - and indeed for everything that is connected with it, thus 
also including the military supervision, the military administration of 
justice, including the systems of garrison administration and military 
construction, the military education and development system, the 
technical institutes, the relief and military widows funds - and, further, 


The German State 

the clothing and arming of the troops!!! The entire amount for our 
entire army amounted in 1913 - thus in the last full year of peace, to 
775,385,300 marks. Such comparative figures provide a deep insight. 
While the socialist and democratic side constantly hustled against the 
"burden of the military armaments" in the parliamentary sessions and in 
the press, one also never finds even a single word against such interest 
burdens - far eclipsing all other expenses - from public loans. Indeed, 
one could have paid the entire navy too out of the interests for the loan 
for the general need. The entire expenses for our proud Reichsnavy 
amounted in 1913 to 197 million. And one should consider that all 
these expenses could have been defrayed without a penny if our state 
budget had not been burdened with such gigantic interest burdens. A 
handful of large loan capitalists - the couple of thousand 'hangers- 
on', of small savers with their possessions of a couple of thousand 
marks, do not at all play a role in such public loans - thus pocketed 
year in year out, fully without work or effort, amounts with which we 
could have maintained and paid our entire Reichs administration, our 
entire army and our navy. 

One who, in view of such figures, does not acquire an understanding 
of the all-surpassing importance of the interest problem in general 
and of the fully failed national financial policy with its loan economy 
in particular cannot indeed be helped. What is more, the figures and 
numbers which provide such an insight are accessible to everybody, they 
are found in the Statistical Yearbook for the German Reich published 
with the greatest conscientiousness by the former Royal Statistical 
Office and they are found likewise in the Statistical Yearbook for the 
German Reich, Puttkammer and Miihlbrecht Publishers, published by 
the Republican Statistical Reichsoffice. 

That such imbalances between the necessary expenses for the 
Reichsadministration, the army and navy and the expenditures of 
the state for the interest payment to loan capital become an injustice 
crying to the heavens will however become fully clear only when we 
examine in what way then the Reich now covers its monetary need 
for these interest payments. Here we come to the field of customs and 
taxes. 1 must point here once again to the thorough representation of 
this situation in my book The coming tax strike, where I have produced 


Gottfried Feder 

the conclusive proof that the largest part of all the taxes is borne by the 
wide masses of the working population. We thus have the fact before 
us that the state at first, in complete disregard of the possibilities lying 
in its financial sovereignty, ventures on the loan route for the execution 
of large public tasks, that is, incurs debts; that it then thereby further 
burdens its budget in such a way that it must use all its net revenues 
for the interest payment and that it further must oppress the people 
with duties and taxes only in order to be able to meet its interest 
obligations. All essentially necessary state tasks it must now combat 
in the provincial- and Reichsparliament against the greatest resistance, 
and finally the state sees itself in the role of an interest-collector for the 
loan capital, as we see it today. 

The way out has already been pointed out a long time ago - after 
such a detailed examination of the present absurd conditions it is 
obvious; it is that: 

The state will finance all large public undertakings of the Reich 
by virtue of its financial sovereignty and after approval by the 
population through the parliament with the strictest avoidance of 
the loan route through direct allocation of means through cashless 
transfer transactions or through the issue of interest-free state 
treasury notes. 

I can make this measure clear best through an example: the 
development of the Bavarian hydro-energy. 

The plans and efforts to make the enormous hydro-energy existing 
in the mountain rivers, in combination with the large mountain lakes, 
useful date back to already more than two decades ago. Unquestionably, 
in the case of this hydro-energy, it was a matter of energy sources of 
the country which belong to the community and were to be taken from 
it and used for personal profit. Thus it is clear that, in the development 
of such large structures, many public and private legal interests were 
affected. It is a matter here of a field that belongs exclusively to the 
sphere of influence of the state. The people also now orally approved 
the credits through their representatives in December 1920. It had 
been sufficiently advised and tested and replanned repeatedly and one 
was fully clear about the great economic advantages. The state and the 
people had decided to exploit the energy sources, now they had, with 


The German State 

this credit approval, simply to take the corresponding decision that the 
amounts earned by the entrepreneurs could be paid out directly by the 
state bank on the basis of the approved credits. Whether this would 
occur without cash, by way of transfer into the giro transactions, or 
through credit advice to postal cheque accounts or in cash is finally a 
matter of indifference. 

It is really obvious and clear, if we imagine that the state bank 
for such purposes would issue its own money to the amount of the 
necessary and approved credits. These hydro-energy construction 
notes thus represented to a certain degree state treasury notes that 
would be issued to the rising water works as anticipatory credit under 
state guarantee. It was thus a matter of a money covered in manifold 
ways. The coverage consisted first in the ready or rising Walchensee 
work, etc. and secondly in the state guarantee that the money is 
accepted at full value from the public treasury instead of payment. 
The construction notes would be at the same time partial debentures 
on the waterworks, without interest claims however being bound to 
them. This is however, as is well known, not the case with any other 
notes that are in circulation. 

The hydro-energy construction notes could very well make these 
specifications on the full coverage of their value in the text of their 
imprint. For example: "This thousand mark note finds its coverage 
partially in the value of the installation being erected for the 
exploitation of the Bavarian hydro-energy. It is accepted in all state 
treasuries as payment". 

If one wishes to go further, there stands nothing in the way of the 
state's pledging to provide, after the completion of the work, against 
the deposit of the note, so many kilowatt hours of electricity or so 
many hundredweights of nitrogen. 

Nobody would refuse to accept such money issued by the state 
that is completely covered by material goods, that can at the same 
time be used to some extent as a ration coupon for electricity. On the 
contrary we may be sure that such a money would enjoy a special 
popularity, for this money is - stable, exactly as stable as a dollar, 
or much better because one can receive for it a quite definite amount 
of electricity or nitrogen - independent of economic fluctuations. 


Gottfried Feder 

It is a sign of the complete narrow-mindedness of men that in the 
public propaganda of different debaters the objection arose that - 
"nobody would accept this money". No man has ever hesitated, even 
these debating gentlemen - to accept money that the state has issued. 
Everybody has accepted even the most damaged paper money of the 
Reichsbank even though this money was pure inflation money. And 
yet everybody accepted it, even when the clever speculators tried to 
get rid of it as quickly as possible against foreign currency or goods. 
Indeed, nobody has refused even the emergency currency of cities and 
communities that was similarly uncovered paper money. And now 
should such a preferable covered paper money as the construction 
money completely covered by material assets is for our large works not 
be accepted immediately? Surely, even those who raise such objections 
against interest-free government money on behalf of, or in the spirit 
of, their masters do not basically believe that. It is indeed proven to be 
irrefutable, in spite of all the complaints of the "metallists" who would 
like to consider as money only money made of precious metals, that 
"money" is that which the state declares to be money - whether this 
money is constituted of paper or porcelain, iron or leather or any other 
material is a matter of complete indifference. It is quite different when 
it comes to the purchasing power of this money. There the metallists 
are right that a currency made of gold by and large retains its exchange 
value even when political disturbances shake the state. This stability, 
however, the metallic money made of precious metals does not owe 
to its monetary character but to its character as a commodity, namely 

There can be no doubt at all about the justification of the state 
in covering its monetary need for a large work in the way described. 
First, the state is sovereign, that is, it does not need to be influenced by 
anybody, for it has the power, and, secondly, such a measure can stand 
up to the strictest commercial examination. The state issues with this 
cash in a way vouchers on the basis of its credit. Why should anybody 
have less regard for the credit of the state than for the credit of any 
banks, especially when the state is producing useful works for the 
welfare of the community. Even if one said that the state however pays 
the performed work (the entrepreneurs and workers who are engaged 


The German State 

in the Walchensee work) with paper, that is indeed right because later, 
after the completion of the works, the state accepts this paper once 
again as payment for the work performed by it (supply of electricity 
or nitrogen, etc.). Therewith the economic cycle is completed. The 
construction notes are thus once again redeemed from the electricity 
supplies, etc. of the first years, the notes are destroyed, and a gigantic 
work of governmental organisational art has been created in an interest- 
free way as an interest-free possession for all. A work that has tapped, 
without a great burdening of the electricity consumers, another large 
source of money for the state which brings the state in turn closer to 
the ideal goal of a healthy national financial policy - the state without 

Now, there is, in addition, the fact that the described process 
with the issue of one's own construction money for a certain work 
does not at all necessitate the issue of the entire approved amount 
in such construction notes, because indeed by far the largest part of 
the payments to the entrepreneurs does not occur in cash but cash- 
free, through transfers. But, even assuming the case that one issued the 
entire new construction amount in new state bank notes, these amounts 
in comparison with the other amounts that the state today needs would 
not at all be considerable. At the same time that one broke one's head 
in the Bavarian parliament on account of the 800 million credit for 
the Bavarian hydro-energy - or better: did not break but just resorted 
once again to "loan" -, 8000 million was approved in the parliament 
"without debate in the third reading for the purposes of the general 

Here I recall once again the considerations that, in the case of such 
a financing through the new issue of money, no inflation of any sort 
would be brought about, that on the other hand the issue of interest- 
bearing bonds during the construction period in any case signifies 
a certain inflation since interests must already be paid even though 
though no productive work is yet performed by the works. 

In no way however is the national economic balance between 
money and material goods, in the sense of the quantity theory, affected 
for, against the increase of means of payment on the side of money, 
there stands an exactly greater increase in goods. If then later, through 


Gottfried Feder 

the revenues of such works, the issued money is once again withdrawn 
and destroyed, then the national economic balance is naturally 
improved to the advantage of the national wealth according to the total 
value of such new works. 

Even here let it be pointed out how severely the interest operates 
on the costs of the products of such works. Oskar Pobing 92 has 
determined in a detailed examination of this question that the 
production costs for a kilowatt hour are made more expensive through 
the burdening of the loans with interest to the enormous amount of 
500% (!). Now the electricity from our Bavarian Hydro-electric works 
comes to us five times more expensively because we have once again 
resorted to the loan route that lies "closest at hand". Even here it is 
appropriate to imagine that the entire material and personal expenses 
for the operation and maintenance of the large Bavarian electric works 
and interurban offices - thus all the wages and salaries for all persons 
occupied in these works - sluice attendants, machinists, workers, 
labourers, supervisory personnel, and further the entire technical and 
commercial administrative apparatus up to the directors together draw 
for their work year in year out only a fifth part of the amounts that the 

- so very good - loan capitalists draw year in year out, without effort 
or work - as interest. 

Interest devours everything, interest makes everything more 
expensive. Only loan capital has the benefit, the population has 
the damage. The population that builds the works through its own 
strength has the damage; for who then builds the Bavarian works? 

- indeed Bavarian engineers, Bavarian workers, Bavarian foremen 
and entrepreneurs; Bavarian factories supply most of the machines 
and equipment - and for that which is not produced in Bavaria itself 
Bavarian grain or cattle must be given, thus Bavarian work must once 
again be given in exchange - only the Bavarian people do not put up 
the money for the construction (apparently!), and so for that it needs 
the large capitalists from New York and London, Paris and Berlin. The 
Bavarian people must borrow from all the countries of the world and 

92. [Oskar Pobing ( 1 882- 1 956) was a Bavarian mechanical engineer who worked in the Technical 
University in Munich. He was the author of studies such as Die Wasserkrdfie Bayerns (1919) and 
Zur Bestimmung strdmender Fliissigkeitsmengen in offenen Gerinnen (1922).] 


The German State 

burden its hydro-energy with an interest payment which makes the 
electricity 500% more expensive! 

Is this not madness? Is this not an economic crime? of the people 
who have done nothing but at one time set their pen in motion and 
written out a cheque or directed their banker to sign the Bavarian 
hydro-electric loan, these receive for that, year after year, interests 
paid by the Bavarian people. 

Not only that but the waterworks are therewith no longer a free 
possession of the Bavarian people but they are pledged to the capitalist. 
Especially funny is, further, the situation that the large capitalists 
would naturally not lend "their good money" to a state which is not 
in itself "good" for capital and interests, which therefore still enjoys 
so much credit that one can pump 800 million into it. And in fact the 
tenders for the hydro-electric bonds contained the guarantee that is so 
enticing and assuring to the capitalists "that the Bavarian state with its 
entire wealth guarantees for capital and interests - (!)" 

Moneybag, what more do you want! So here the Bavarian state 
admits quite expressly that it is worth so much, that one could loan to 
it 800 million for the Walchensee hydro-energy and the Middle Isar 
but - it cannot use its financial sovereignty and finance these works 
through its own authority. Why?? Because it is too deeply enmeshed in 
the loan and interest madness, because its responsible statesmen do not 
have so much thinking capacity and feeling of responsibility of their 
own that they dare to judge these simple and clear plans for an interest- 
free financing by themselves; they therefore turn to the professional 
banking experts. This is exactly as if a consumptive were to ask his 
tuberculosis bacilli whether they thought it right that he go to Davos 
or to Engadin 93 in order to get rid of his illness, and these assured him: 
"No, just do not do this, the journey could harm you, perhaps a railway 
accident may occur, rather stay at home in your house, in your usual 
environment. In your condition you should not make any experiments! 
etc". With the adherence to this advice that is from the viewpoint of 
the tuberculosis bacilli quite right, the consumption naturally makes 
a ripping progress, the bacilli multiply wonderfully. Exactly so in our 

93. [Davos in Switzerland has, since the middle of the 18th century, been famed as a medical 
resort for those suffering from lung diseases. Engadin is a valley in the Swiss Alps.] 


Gottfried Feder 

case of the financial and interest economy. 

This getting advice from one's own opponents is extremely 
characteristic of the unsuspecting Germans. If a man appears who loves 
his people passionately and advices them this and that and alerts the 
responsible men to this or that knavery, one can bet ten to one that the 
concerned people would run to the knave and ask him quite naively: 
"Tell me, so and so has told me that you are a rascal, please tell me 
if that is right!" And if the other then explains to him with the most 
honest face in the world: "But what do you think then - 1 a scoundrel! - 
on the contrary, I am your best friend, I have always helped you out of 
our financial difficulties", then the guileless questioner is quite happy 

- he has done enough and he is especially glad that he does not have 
to strain his brain. The troublesome friend of the people, however, he 
does not in general deem worthy of his answer - and things are further 
stuck in the rut of the interest capitalistic loan policy until the last item 
of free national wealth is pledged to the financial powers and the entire 
nation only pays interest to the international finance. 

In conclusion we must, precisely in this context, further point to 
the fact that the Bavarian state - when it was not in any way a matter 
of such an important state task as the development of the Bavarian 
hydro-energy however is, that is, when it was a matter of remedying 
the monetary crisis of the November government - was very prompt in 
issuing from the Bavarian state bank around 130 million state treasury 
notes of the Bavarian State Bank. This happened completely uncovered 

- and everybody took these Bavarian notes exactly as willingly as the 
notes of the Reichsbank, and everybody could buy for himself as much 
bread for the Bavarian vouchers as for the Reichsbank notes. Indeed, 
it did not even have to be the entire Bavarian state, it was enough 
if the mayor of the provincial capital Munich and some city elders 
had their names printed on such colourful bits of paper, and even this 
emergency money circulated, everybody took it and everybody gave 
it out exactly like the scraps of the Reichsbank, and this emergency 
money itself fulfilled the task of any money - of being an aid for the 
exchange of goods - in an unobjectionable way. 

Only one office was extremely unpleasantly affected by these 
artificial pieces of the provinces and communities - high finance - 


The German State 

and they forced a Reich law in October 1921 according to which 
it was strictly forbidden to the provinces and communities to issue 
emergency money any further. This law was in its effect a clear law 
for the protection of the Jews, which was to be followed in 1922 by the 
"Law for the protection of the republic". 

I can very well imagine the sudden fear of international finance 
when they recognised that in the interest-free money, even in the 
harmless form of emergency money, the people held in their hand a 
weapon - naturally without the people knowing this - which could 
with one stroke tear apart the golden network established with lies and 
deception through centuries-long underground and counterfeit work 
and liberate the peoples from their interest slavery. 

Already at that time, in the case of the issue of the Bavarian state 
money, the Reichsbank demanded very soon that this money had to 
be withdrawn once again, which also then occurred in a compliant 
manner in the course of 1921. The reason: this money brought high 
finance no interests as the money of the Reichsbank does through the 
indirect route of the Reich's treasury bills. 

In the National Socialist state, in future all large state tasks will be 
financed and organised in the way described with a total avoidance of 
the loan route. We shall naturally take the indirect route of the interest- 
free construction money in general only if the necessary means cannot 
be raised from the surpluses of other state enterprises or from special 
levies for such special purposes. In any case we know that this form 
of financing opens quite undreamt of and enormous possibilities of 
tapping the natural resources of the country, improving the transport 
routes, etc. 

Every nation is as rich as it is able to organise work. 94 

94. [This is reflected in Hitler's speech to the Reichstag on January 30, 1939 in which he declared: 
"Under the compulsion of ... need we have learned in the first place to take full account of the 
most essential capital of a nation, namely, its capacity to work." (quoted in R de Roussy de Sales 
(ed.) Adolf Hitler: My New Order, London: Angus and Robertson, 1 942, p.457f.).] 


Gottfried Feder 

The social construction- and economic bank 

In logical connection with the previous chapter stands the creation 
of a social construction- and economic bank which has the task of 
issuing interest-free construction money especially for the construction 
of houses. Of course this social construction- and economic bank 
should not be conducted as a state institution but as a corporation of 
public law. Logically therefore the discussion of it should come after 
the representation of the National Socialist tax system, but since this 
social construction- and economic bank is nothing but the interest- 
free financing transferred to the conditions of the private economy and 
indeed especially to the housing construction system - thus a branch 
of the economy of the most universal significance -, placing it first is 
perhaps justified. 

Why such a construction bank should not be conducted as a pure 
state enterprise is due to the fact that such a public legal financial 
institution must be more freely manoeuvrable than a state enterprise 
can be. It would not be so much of a reason if it was a matter of only 
mere housing construction, but there will be many cases where it is a 
matter of tasks of the greatest importance which indirectly affect the 
public interest, and then the bank, which is indeed responsible in its 
leadership to the state for its management, should and must have a free 
hand in issuing also interest-free credit after a thorough examination 
of all conditions. 

Such a freedom of decision however is not possible in purely state 
enterprises. That is why this must be left to private initiative. 

By way of illustration may be presented here the sketch of such a 
law which was passed in 1922 for Bavaria: 

Law on the development of a Bavarian social construction- and 
economic bank. 


A national Bavarian social construction- and economic bank (B WB) 
shall be founded. 


The German State 

The BWB has the task of financially supporting enterprises of the 
state or national economically valuable enterprises of private persons 
(whether it be individuals or societies) which serve the development of 
the country or are beneficial to the general welfare. 


The BWB is a corporation of public law. The more detailed 
prescriptions regarding its organisation, its administration and activity 
and its directorship will be decreed by the entire ministry. 


Permission is granted to the BWB to issue at first interest-free 
treasury notes covered by material assets to an amount of up to 50 million 
gold marks. 

The issue may occur only in such a legal way that the amount of 
the money amounts issued at any time and in circulation is covered 
by material securities of at least the same value (interest-free security 
mortgages, security bills of sale, hypothecations, etc.) and the repayment 
or the return of the treasury notes is secured by the revenues of the 
enterprises or institutions to be developed within an appropriate time- 
limit, at most 50 years. 


The sum of the pledges and securities due to the issued treasury 
notes of the BWB constitutes the coverage association of the BWB. 

Legal transactions of any sort which disturb or harm a security or 
property coverage belonging to the coverage association are void. 

Property- or possession changes of any sort to objects or rights 
subject to the coverage organisation do not affect the existence of the 
securities and remain attached to the object even for the new purchaser; 
the predecessor in title is freed of personal liability only when the BWB 
agrees to the change in the person of the debtor. Contrary arrangements 
are void- 
Art. 5 

The entire constituents and rights of the coverage organisation of 


Gottfried Feder 

the BWB is recorded in this public register; the principles and legal 
consequences are valid for this book correspondingly as for registers; the 
register has public confidence and the presumption of right in itself. 

Access to the register or the pertinent sections of it is to be granted 
to everybody who evidences a legal interest in the access. 

Balance-like summaries are to be published annually on the total 
amounts of the issued treasury notes, as well as the total amount of the 
securities due to the BWB for these, as well as additions and deductions, 
and on the successful repayments and redemptions of treasury notes. 


The treasury notes of the BWB are legal currency. Everybody has 
to accept them at the full rate of their face value against the exchange 
rate of the other legal currencies of the state. If a creditor refuses the 
acceptance of treasury notes of the BWB instead of payment at the above 
mentioned minimum rate of exchange, the debtor is, insofar as he has 
actually offered the payment in treasury notes, freed of the debt of this 

The BWB issues the treasury notes interest-free and agrees upon, in a 
contract, the general and special conditions of the mutual legal conditions 
regarding the periods and rates of the issue, the securities and mortgages 
to be paid by the debtor, as well as the repayments and other pertinent 
legal conditions. A copy of these contracts is to be made accessible to all 
as an appendix to the entries in the register of the coverage association. 

The BWB is justified in determining surcharges or fees for the 
administrative costs in the commitment of loans and for the yearly 
collections or in determining corresponding premiums or discounts at 
any time in a uniform public manner. 

The issue or the stock-exchange quotation of a higher rate than the 
minimum rate determined in Art. 1 is permissible. 

The repayments can be made only in treasury notes of the same sort 
as those issued. 


The activity of the BWB, insofar as it extends to the observation 
of the prescriptions contained in this law, is subject to the control and 
supervision of a public supervisory council consisting of the Finance 
Minister or a representative to be named by him, the Minister of the 


The German State 

Interior or a representative to be named by him, the Justice Minister or a 
representative to be named by him and three persons to be elected from 
the parliament for a duration of two years. 


Penalty clause: Imprisonment penalties for intentional damages to the 
securities of the coverage association and likewise for commercial or 
customary, especially stock-exchange, sabotage of the construction bank 
notes or the exchange rate value of the same or for an attempt to do so. In 
addition, high monetary penalties for this, even to juristic persons. 

In the "executive conditions" precise prescriptions were then issued 
on the constitution of the board of directors and the advisory board 
to which belong representatives of the ministries, the parliament and 
the builders. The task of such an advisory board is the control of the 
legal use of the construction notes, the examination of the repayments, 
further the verification of the hypothecary indemnities, the approval of 
the bases of the mortgaging with interest-free construction notes, etc. 

The further conditions then regulated the repayment and clearance, 
the stock-postings on the issued series of construction notes and on 
the securities registered for it, and, further, more prescriptions on the 
approved construction designs, etc. At that time the inducement to the 
establishment of such a social bank was provided by the enormous 
housing need and the circumstance that the Reich and provinces could 
not in any way control the distress in an effective way. The concerned 
institutions of housing offices could of course free up living spaces 
here and there - but they could not build any new housing. The new 
construction activity suffered from a lack of materials, above all 
from the fact that, with the existing emergency control of rents, the 
construction of new houses was absolutely "unprofitable" for private 

The grants given by the Reich and the provinces for the coverage 
of the so-called lost construction-expenditure were not sufficient by far 
in the progressing currency devaluation. Even the individual housing 
constructions begun here and there could not remove the general 


Gottfried Feder 

housing distress. Even the creation of cheap mortgage monies was 
impossible because, with the rents fixed at that time, even the cheapest 
construction money precluded a 4% interest. 

It happens therefore that, as already suggested in the fundamental 
observations, in spite of the greatest need - on account of insufficient 
profitability - the need is simply not covered. 

Now then, if one succeeds in removing the annually recurring 
interest burdens, if one makes provisions to place interest-free means 
at the disposal of those needing housing, a stimulation of the housing 
market in a grand style is possible. Therewith however would not 
only the frightful housing need with all its social and health damages 
be removed but also the internal market would be stimulated in an 
extraordinary manner because all the innumerable ancillary trades, 
the locksmiths, carpenters, roofers, plumbers, the glaziers, installers, 
ceramists, the floor-layers and tilers, the painters and plasterers depend 
on it, they then for their part find work and bread and are strengthened 
in their purchasing capacity. 

This means however is offered in the interest-free construction 

These construction notes are issued by the "Social Construction- 
and Economic Bank". The suppliers and entrepreneurs are paid 
for the construction with this money. The building owner pays the 
received interest-free money back in appropriate instalments within a 
period of 30-50 years according to the character and durability of the 
construction. The construction notes are different from the Reichs- or 
provincial money rather in same manner that the Reichsbank notes 
were different from the loan treasury notes. These construction notes 
find, as already mentioned, their full material coverage in the fact that, 
at the same time there arise, to the credit of the construction bank, equal 
in amount to the issued notes, new material assets (houses) which are 
legally secured through the registration of interest-free mortgages to 
the same amount. 

Practically also here the full value of the new buildings will not be 
given in construction notes but only the actual building expenditure. 
The land will therefore have to be made available at least by the 
builders or the building societies or the communities and, beyond this, 


The German State 

at least 10-30% of the building value must be produced by those in 
need of housing, of which 5% is to be retained there for the coverage 
of the administrative costs of the construction bank. 

The repayment then follows without further calculation of any 
interest. In this manner the free property of the house-owners grows 
from year to year in their houses and likewise the values retained within 
the total association as coverage for the issued construction notes. 
Thereby the amount of construction notes in circulation diminishes 
according to the repayments effected. 

The legal character of this construction money is nothing other 
than the issue of a bond. The debtor of this bond is the construction 
bank. The creditor of a bond is the current owner of this bond. 

Nobody can be forbidden to issue bonds, it is always only a question 
of the external circumstances, whether the bonds issued by somebody 
are accepted generally as payment. As mentioned many times before, 
the construction notes are always and under any conceivable economic 
and political condition fully covered by the material assets against 
these. There can therefore be no question of the bank's falling into 
difficulties at any time. 

The universal acceptance is however guaranteed the moment 
that the state pledges to assume the guarantee for the time-limited 
redemption of the construction notes and, during the duration the 
notes, to accept the notes in their registers as payment or when they 
are declared to be legal means of payment. 

Such an acceptance of the guarantee now does not mean for the 
state, practically, the least burdening; on the contrary. Today the state 
must actually spend and pay interest on, and then recoup through 
general taxes, uncounted millions yearly for the grants approved by it 
for lost construction expenditure. This is then fully cancelled. 

The grants now given by the state are thus really lost money which 
must be recouped by the community, and which go to some lucky 
people who were indeed able to grab such grants. 

Thus even when a delinquent payer among the receivers of 
interest-free construction notes actually at some time cannot meet his 
obligations, this does not play any role in relation to the enormous 
savings which the state budget makes because it also does not, in this 


Gottfried Feder 

way, have to make any sacrifices that are fully lost. 

Since it is a question of a task of great social significance, it is 
justified to establish an independent public legal corporation as the 
instrument and bearer of its execution. 

In this way this institution will be removed from the sphere of 
the private economic social forms to which naturally personal profits 
and enrichment intentions are attached in the eyes of the people. On 
the other hand, the institution will be removed from the domain of 
the pure state enterprise, against which likewise, not entirely without 
injustice, a certain aversion exists in all economic matters among the 

In the implementational regulations everything is to be recorded 
that is basically indispensable for the public and for the security of the 
business management of the bank. 

The proposed advisory council can make its influence felt beyond 
this. The advisory council itself is again a reflection of all the interest 
groups concerned. 

The establishment of a construction bank as a public legal 
corporation also has the pleasant by-effect that in this way the entire 
complex of the wealth values created in this manner does not appear 
as the property of the state but as the property of an independent legal 
entity, which is the construction bank. 

The juridical construction or the legal character of this construction 
bank is thus the following: The construction bank is a legal entity by 
virtue of the circumstance that it is recognised or established as a 
public legal corporation; this construction bank does not at all consist 
of individual members; it is in itself the bearer of the rights and duties 
that are developed from its activity. It is however also not an official 
and not a state institution, not a member of a state organism. 

The creation of such a legal form is indeed not something common 
and traditional; but nevertheless something already provided for in 
the law; the present-day conditions however demand corresponding 
institutions of a modern sort. Herein indeed will lie the service when 
something of this sort is established: that, in a certain way, one goes 
beyond the limits of the traditional in order to adapt to the demands of 
the age. 


The German State 

How the conduct of the businesses proceeds is to be explained best 
with an individual example: The construction bank makes known in 
advance the fundamentals and preconditions which must be fulfilled if 
a request for approval of construction-bank money is to be considered. 
The applicant directs his request with the necessary documents to the 
construction-bank and, in affirmative cases, concludes a contract with 
those in need of housing (house owners). 

In this contract is to be provided in the first place everything that 
the construction-bank ordinance and implementation regulations 
prescribe, thus the obligation to use the construction money only for 
the construction of the building, the obligation to a mortgage status 
and the repayment obligations. But, furthermore, all other pursuant 
legal conditions are to be laid down in this contract. It must especially 
be determined that the one in need of housing is not justified in 
selling the property again, which is moreover already highlighted 
practically in the mortgage order. The conditions for the devolution of 
inheritance and for the case of default of payment are to be regulated 
correspondingly with one or more repayment instalments. 

(Details arise from the nature of this matter). 

Because all delivery firms and all workers are paid only in 
construction-bank notes which the construction bank itself produces, 
construction bank notes come into circulation for the first time in all 
circumstances only to the extent that the equivalent in payments accrues 
to the property. From the workers and suppliers the construction-bank 
notes reach the public; in consideration of the existing securities and 
especially because the state assumes the guarantee for the construction- 
bank notes and state treasuries accept the construction-bank notes 
as payment, the public will accept the construction-bank notes like 
any other money. So it remains left to the house owner how he fulfils 
his obligation to the construction-bank of repaying annually 2% of 
the loaned amounts in construction-bank notes. In other words, the 
building owner and mortgage debtor of the construction-bank must 
produce every year 2% in construction-bank notes from the amounts 
found in circulation. Practically it will happen that the mortgage 
debtors will collect construction-bank notes which indeed circulate 
along with the local money before the expiry date of their repayment 


Gottfried Feder 

dues and therewith satisfy their payment obligation. A specially suited 
place where to get construction-bank notes will be the construction 
sites that are to be found in operation at any time. 

If one supposes, in order to have an idea, that in a year construction- 
bank notes are issued in Munich for 10 million, from this annually 
200,000 gold marks will return to the construction-bank; thus, after 
50 years at most, the entire 10 million will have returned and been 
collected by the construction bank, after 50 years at most the houses 
built from it are therewith repaid and become the debt-free property 
of their owners. The entire payment has occurred without a penny 
being paid uselessly for interests; the payment is further accomplished 
through nothing but the simple means of the establishment of the 
construction-bank, bound with the state guarantee. 

The social act consists in the fact that the state has produced the 
value of the houses absolutely from nothing, that it created an income 
for thousands of workers and businessmen through the construction 
of this entire building. If one supposes that it is a matter of thousands 
of individual houses, thousands of landless are therewith transformed 
into landed persons. 

Different objections and reservations will be made, of which the 
most important may be suggested: 

a) The objection of inflation. This objection is as short-sighted as 
it is irrelevant; as already explained in earlier passages, an inflation 
can arise only where uncovered money is issued. Here the material 
coverage stands against the construction-bank notes; it is therefore 
inconsequential if even considerable amounts of construction-bank 
notes come into circulation. 

b) The objection that this matter is new and untested. This objection 
is actually inapplicable, and the matter is new perhaps for Germany. 
Elsewhere, one is used to such interest-free debt certificates covered 
by material assets. The typical example of this is the English warrant 
which was introduced a hundred years ago and is still preserved. The 
warrant is an order that gives the owner the right to a certain amount 
of crude iron lodged in a certain central storehouse. These warrant 
notes are used as currency; the purchasing power of the warrant has 
only those fluctuations to which the crude iron price is subjected on 


The German State 

the world market. 

If we had in Germany, for example, such warrants, these would 
have been completely independent of the German currencies and their 
fluctuations. The value of these warrants was related to the crude iron 
price, and the value of these prices in turn was automatically regulated 
in relation to the currency. 

In the warrant we find the significant example of the popular 
nature of this interest-free debt certificate and debt-order covered by 
a material asset. 

Insofar as considerable and national economically important 
erections of new buildings must be realised, it is imperative to construct 
entire colonies in series. 

It would be a defective viewpoint if one wished to construct 
individual houses or even terrace houses only when the person 
looking for a house himself wishes to become an owner. The damage 
that has to be remedied is the housing distress, it is thus not a matter 
mainly of housing but it is a matter primarily of the creation of 
housing opportunities. This need will also be remedied by the fact 
that the commercial construction of rental flats is promoted. Nothing 
therefore prevents a rental house owner of the old style from receiving 
construction-bank notes for the construction of a new rental house. 
Precisely in the case of such persons it will be possible to demand 
in advance in cash a greater prepayment than only 1 0% of the entire 
building value; many of these people are ready and in a position to 
spend considerable sums of money from their own means for housing 
construction if they receive as a grant a corresponding remainder or 
partial amount interest-free from the construction-bank. Precisely the 
interest-free nature of the construction-bank money makes it possible 
to take into consideration this aspect of the revival of the building 
market that is so extremely important for big cities. 

This social construction- and economic bank however will 
also pass over later beyond the limits of the financing of housing 
buildings to issuing interest-free credits to national economically 
important undertakings, industries, communal works, improvements 
in agriculture, etc., even if with a shorter repayment time-limit. 


Gottfried Feder 

The state without taxes 

The main goal of the National Socialist state is: the state without 
taxes. If this may sound under the present-day circumstances like a 
mad Utopia, if it may seem to many as a promise that is too good to be 
true, we know nevertheless that this goal is completely reachable, at 
least insofar as the enormous tax pressure must be removed from the 

With all clarity have we presented in the preceding chapters the 
proof that today almost all taxes are devoured just by interest payment. 
We pay taxes in every piece of bread that we eat, every warm parlour 
costs an excess of taxes, ever purchase is burdened with the sales tax. 
But everything that goes into taxes in this way is not, by far, sufficient 
to pay the taxes on the reparation debts alone. 

It always betrays a lack of taste and critical understanding if one 
dismisses such a principal goal as doubtlessly the state without taxes is 
as a Utopia. For one who has gone with us on the wide and convoluted 
paths of the present-day financial politics and one who has not lost the 
Ariadne thread - the interest obligation of the state - it must be an easy 
thing to find also the way out of this labyrinth of the Minotaur. 

One who raises himself above the degradations and surveys from 
an elevated standpoint the connections described: interest obligation 
of the state - tax - inflation, one who has recognised the interest 
obligation of all nations of the western cultural circle as the fact 
dominating everything, one who has recognised that we live in an 
age of a complete reversal of the healthy and reasonable conditions 
between work and wealth, one who can no longer avoid the pressing 
logic that especially the state, by virtue of its financial sovereignty, 
is not completely bound to the loan route but that it can creatively 
finance through its own right all large public state tasks, for him it 
is only the last step into a financial political New World to demand a 
state in which the state financial administration does not consider it as 
its first task to extract as much tax as possible from the state citizens 
but, on the contrary, to remove every burdensome tax pressure and to 


The German State 

fertilise the national economy. 

We are in a position to present the numerical evidence that the state 
without taxes is not at all a Utopia but that the possibility of that is given 
in every orderly state budget if the state frees itself from the interest 
burden lying upon it. That it can do this also without it being called 
to account for it is proved by the history of state bankruptcies which 
relates dozens of cases in which the states have through bankruptcy 
escaped from the interest and debt burdens lying upon them. 

It would take us too far afield to go into detail here once again 
into the precise demonstration that I have given in my small polemical 
work, The state bankruptcy: The solution, that, namely, the adjustment 
of the interest payment from the public loans in a simultaneous 
transformation of the bonds into interest-free bank assets does not in 
any way deserve the disreputable name of bankruptcy but that this 
form of liberation of the state and people from its interest-bound 
debt actually signifies the freedom of the state and economy from 
unbearable chains. 

An adjustment of these interest payments however would have 
made possible, already before the war, the coverage of state expenses 
for the entire state administration. I have presented the Bavarian state 
budget of 1 9 1 1 as an example. At that time, the revenues of the Bavarian 
state from the so-called commercial state enterprises (railways, post 
and telegraph) amounted to 120 million gold marks, the revenues from 
the state forestry 40 million. The total expenses for the entire state 
administration for the administration of justice (all district courts with 
their entire personnel and material expenses, all provincial courts, the 
regional courts and the highest law courts in Munich, Nuremberg, etc.) 
amounted to 27 million. For the entire large and so carefully developed 
internal administration of the entire Bavarian state - thus for the 
numerous district courts, for the county governments, for the police 
department of Munich, for the gendarmerie, further for the numerous 
other bodies and authorities like the medical authorities, the provincial 
vaccination hospital, the research institutions for food and semi- 
luxury foods, the sanatoriums and mental asylums, the administrative 
court, the provincial statistical office, the metrological authorities, the 
insurance chambers, etc. -, in 1911, 40 million was disbursed in the 


Gottfried Feder 

state budget. For education, school and church, thus especially for all 
the middle schools, the secondary schools, the preparatory schools, 
the Latin schools, the secondary education schools, the junior high 
schools, the higher vocational schools, the teacher training institutions, 
for all the state construction schools and specialist schools, the trade 
and music schools, the agricultural and district farming schools, for 
Weihenstephan 95 and for the biological research institute, for all the 
women's educational institutes, and then, above all, for the universities 
with their innumerable collections and institutes, the technical 
university, for the other arts universities, for the trade universities, 
for the academy of music,then for the Maximilianeum, 96 further for 
the central institutes for science and art, the academy of sciences, the 
scientific collections of the state, the Bavarian museums, the state 
library, the state theatre, etc., for these enormous field of activities 
of the Ministry of Culture with its thousands of officials, with its 
enormous art treasures in the collections and museums, all of which 
indeed require buildings, administration and care, in 1911, 51 million 
in all were disbursed. Within the field of the Finance Ministry, which 
indeed does not merely exercise functions that extract money from 
the people, lie the activities of the forest administration with hundreds 
of foresters, further the administration of mines, smelting works, salt 
works, the entire central and subsidiary customs offices, the central 
minting office, the state debt administration and the state bank, further 
the surveyor's offices and the provincial surveying office, then also 
the state spa administrations, the court brewery office, Munich, etc. 
This likewise very large enterprise caused an expense of 15 million. 
The expenses of the Transport Ministry were covered by its own 
operational revenues, on the other hand, the pensions of the old 
civil servants demanded further the very high amount of around 36 

Thus altogether the justice administration, the internal 
administration including the buildings - which I have not specifically 
mentioned above - and also the finance administration, as well 

95. [Weihenstephan is an 1 1th century cloister in Upper Bavaria that was transformed in 1803 
into a forestry school and state brewery.] 

96 [The Maximilianeum in Munich was designed by King Maximilian 11 of Bavaria as the seat 
of a students' foundation. Since 1949 it has housed the Bavarian state parliament.] 


The German Stale 

as the education and development, and the pensions demanded 
27+40+51+13+36=167 million. 

The surpluses that the state enterprises, post and railways, mines 
and forests, delivered to the state treasury at around 160 million would 
thus have actually almost sufficed to cover the entire gigantic state 
administrative apparatus - without a penny of taxes! 

The state without taxes would thus have been a reality, if the total 
taxes extracted from the Bavarian people, that is, 60 million of direct 
taxes and 53 million of indirect taxes, and in addition 3 1 million fees, 
altogether thus 134 million, had not had to be used completely for the 
interest payment to loan capital. The interest payment for the Bavarian 
state debts alone demanded 84.6 million (!) and Bavaria had to deliver 
50 million to the Reich likewise for the interest payment from the 
Reich's debt. 

I have given a brief overview of the large and small fields of our 
state life. This appears also especially important because National 
Socialism also bears in mind how extraordinarily much and how much 
exemplary work the old state performed, much that requires no reform 
and no improvement insofar as it does not have to do with matters that 
can never be concluded. Even for every state organism it is true that it 
cannot stand still if it does not wish to become ossified. In many a field 
a fresher and freer spirit will not harm, and here and there thorough 
reforms are appropriate. In many branches of our administrative 
apparatus at least a new spirit must enter, especially the spirit of the 
definite responsibility of the civil servant with regard to his tasks and 
the people whom he serves. 

Only one field was forced into completely false ways - the 
state financial administration. If such circumstances as the ones just 
described are possible, this is indeed a sign that here a radical change 
must be effected. Now this is true, however, already for the state before 
the war - already at that time the state was yoked into the interest 
service for the private loan capital. Nothing reveals in a more striking 
manner the dependency of the state on loan capital already existing at 
that time than a survey of the distribution of the taxes on the different 
forms of income . According to the budget for 1 9 1 1 , that we have based 
our observations up to now upon, landed property was assessed at 12.6 


Gottfried Feder 

million, house property at 12.1 million, the commercial enterprises at 
17 million, but on the other hand, capital pensions with a total pension 
income of 253 (!) million gold marks at only 10 million. This is thus 
really an extremely indulgent treatment of those who can live without 
effort and work at the cost of the working population. 

The myriad small pension incomes - we are thinking thereby of the 
pension group of 70-700 million marks - represent indeed in numbers 
the predominant mass of capital pension tax obligations, that is, around 
150,000, but neither their income from capital interests nor their tax 
payment, at around 0.7 million, would play a role in the state budget - 
but what makes these figures so noteworthy for us is the circumstance 
that the large loan capital has created in these hundred thousands of 
small interest receivers a powerful protective guard against all attacks 
against the effort- and work-free income from interest. 

It is naturally easy to persuade these small interest receivers 
that their savings must guarantee to a certain extent a lasting claim 
to interests, for the similarity of these people who have toiled their 
whole life long and have actually worked for their savings to the 
pension receivers in the state- and employees' conditions is obvious. 
But what differentiates this attitude from the idea of a pension is the 
essential difference that the pension claim depends on the person and 
is terminated at death, whereas the interest claim is a material one and 
is bound independently of the person in an impersonal way to the bare 
possession of money as an "eternal legal claim". 

We shall deal with these connections further in the discussion of 
the general old age pensions, because these observations would allow 
us to find the transition from unjustified eternal interest to the justified 
claim of every national comrade to a care-free old age. 

These small interest receivers do not come into consideration in 
the question that we are dealing with of the remarkable indulgent 
treatment of loan capital on the part of the old state, but only those 
who swallow the lion's share of the capital pensions and who then step 
forth again as the great financial donors of the state. 

So away with this national economic nonsense of a interest- 
capitalistically oriented state financial administration and out into the 
free National Socialist state of work and performance freed of all 


The German Stale 


Once the state is freed of the lead-weight of its interest obligations, 
then one will see what the state can achieve. If new sources of revenue 
of a large scope come in addition, like the tapping of hydro-energy and 
the natural resources of the country, then the state without taxes will 
really no longer be a Utopia but a joyful reality. 

If we nevertheless wish to speak of a tax policy of the National 
Socialist state, this is because from such tax sources the means could 
flow for many tasks which actually await a state solution, for which 
however there were never any more means in the state budget. We are 
thinking here of the broad fields of national health, the fight against 
venereal diseases, alcohol abuse, the promotion of physical sports, 
the more substantial promotion of art and science, maternity leave, 
children's care, the construction of garden-cities and above all the 
acquittance of the debt of honour of the German people to its war- 
wounded and war-widows and orphans. 

The following should be taken as guiding principles for a National 
Socialist state system in the field of tax policy: 

1 .A taxation for purposes of interest payment for internal loans is 

2. Taxes are only permissible for the coverage of state expenditures 
for unproductive purposes, for administration, administration of 
justice, the military, police and health system and education, insofar 
as the surpluses of the commercial state enterprises, the railways, 
post, telegraph, state forests and state mines, as well as the electricity 
supply from the large state inter-urban bases, do not suffice for their 

3. For the coverage of special needs or for special emergencies, thus 
especially for the case of war, direct and indirect taxes are not only 
permissible but commanded. 

4. Direct taxes can be placed on property in any form, but here a 
far-reaching gradation is to be planned. The income is to be left tax- 
free up to an appropriate extent. In this case it should be considered 
more thoroughly than up to now whether the tax-payer has a family 
with children or other care duties. 

5. State officials are basically to be left freed of taxes. For married 


Gottfried Feder 

people children's allowances are to be guaranteed. 

6. Indirect taxes come into consideration in normal times only for 
luxury objects. The state has herein an excellent means at hand of 
operating in a way that would control and increase the prices on the 
production of articles that serve only the nuisance of attractive luxury, 
lavishness and gluttony in eating and drinking, and the excesses of 
fashion. Even pure semi-luxury goods like tobacco, alcohol, wine, 
insofar as they do not serve health purposes, will bear indirect taxes. 
On the other hand, all indirect taxes, such as exploit the people today 
in its entirety, are to be fundamentally avoided. We mean here all 
the nonsensical indirect taxes that operate only in a price-increasing 
manner, on sugar, salt, matches, lamps, lemonade, also the taxes on 
coal that make the production radically more expensive, also the taxes 
on personal and goods transport, and above all the commodity sales 

7. The collection of war- and revolution profits are to be carried 
out as a task of justice. For such a task naturally the foundation of a 
reasonable basis of calculation on which one can compare the present 
wealth with the earlier must first be created. Obviously, here too a 
difference is to be made again between the wealth that arises from 
productive work, for which the war however signified a special boom. 
It is no more than right and proper that from such quite significant war 
profits a part is directed to the community. On the other hand, a much 
sharper evaluation is to be made in the case of that wealth which arises 
from intermediary trade and speculation. 

8. Stamp duties and fees, even taxes that restrict the free right of 
disposal of elements of wealth, insofar as this disposal is not directed 
against the general welfare, are to be limited where possible. To this 
belong also the inheritance and gift taxes. 

Fundamentally the tax financial policy should strive for the final 
goal of the "state without taxes", for it is not the task of the state to 
extract money from its citizens in order to perpetuate a basically false 
state loan economy, but to raise the general welfare of the people. The 
state is not there to be the interest collector for large loan capital but 
to protect the person and property of its state citizens and to make the 
natural resources of the country serviceable to the community. The 


The German State 

means for the unproductive state tasks should, as already described, be 
taken primarily from the surpluses of the commercial state enterprises, 
and secondly from luxury taxes, thirdly from wealth and income that 
lie beyond that which can be obtained through the mere performance 
of work, and only then from the propertied middle-class, as well as 
from indirect taxes on semi-luxury goods whose use is not vitally 
necessary. And only in war-times, in which the life of the entire nation 
is threatened, can the state demand that even the community - as it can 
indeed demand military service from everybody through its service 
sovereignty -, and once again with special reference to the propertied 
classes, make its financial contribution to the conduct of the war in the 
form of indirect and direct taxes. 

In conclusion we may say something more about the question of 
the "commercial state enterprises". One now prefers to point to the fact 
that state enterprises are not "profitable". We have already discussed at 
length the fundamental question of profitability. 

In the effort to conduct the railways, etc. "in a business-like way", 
to "free them from the uneconomic state enterprise" or "to bring them 
into a mixed economic form" is hidden only the badly concealed desire 
of large loan capital to make even this considerable wealth component 
of the nation serviceable to itself. If the state hands over even these 
components of wealth, then it is fully delivered to loan capital and 
it has, apart from the permission to act as an interest collector for 
the loan capital, no more field in which it is sovereign, or in which 
it can operate in a regulatory manner and from which it can obtain 
considerable revenues for the coverage of its tasks. 


Gottfried Feder 

The financial political liberation of the state 

We described first what measures are to be taken in order to make 
circumstances such as we experience now impossible in the future. 
These tasks indeed demand creative services, but they can nevertheless 
be achieved without the existing legal conditions having to be damaged 
or changed. It is different with the breaking of the existing chains of the 
interest-bound debt of our state to its internal and external creditors. 

The measures to be taken here are in themselves extremely simple, 
only their execution will cause many difficulties. The remedy for the 
eternal interest obligation from internal loans is: the legal abolition 
of this interest payment. On the other hand, large loan capital will, 
pleading the interests of the small pensioners, raise a great hue and 
cry and issue the most frightful threats against a state that "tramples 
inviolable rights under its feet", which "commits a breach of law which 
will rob it of its last shred of trust". Large capital will naturally move all 
levers to prevent "the enormous crime against basic economic laws". 
Naturally! - one cannot really expect that an international power will 
suddenly renounce its claim to rulership. 

In this battle it is only a matter of maintaining iron nerves and not 
allowing oneself to be frightened by the howl of the press coolies who 
are maintained by high finance. 

The Jew will conduct this battle with the most tenacious 
doggedness, for it is a matter of "his honour" as the old Rothschild 
said: "My money is my honour, and one who takes my money takes 
away my honour from me". 

Now indeed their money should in no way be taken from the 
owners of the state bonds, but legal demands must just be removed 
that have in their effect become a very great injustice to the national 

But from the viewpoint of the state, as well as from the viewpoint 
of the population who must raise the enormous amounts through their 
work in order to satisfy these "legal demands of the state creditors", 
it is not a matter of "legal demands" but of the greatest injustice of 
all times - of a lasting robbery of the working people in favour of 


The German State 

a small section of large capitalists with state support. A state which 
makes the "breaking of interest slavery " a fact does not in any way 
commit an injustice but it atones for a quite powerful injustice for the 
perpetration of which it itself has performed stooge-service. 

Of course this means a complete reorganisation of the present 
state; it must decide if it wishes to serve the whole or whether it, as 
now, wishes to be the bailiff of international finance. On this question 
there are no compromises. Here only a determined clampdown can 
lead to the goal and to the remedy. 

The National Socialist state is indeed conscious of this powerful 
decision - it would be extremely difficult to take such a decisive step if 
we did not know exactly what we have to set up in place of the interest 
capitalistic economy. But because we know this, we go with the most 
complete certainty of victory into this greatest battle of world-history. 
We know that the rule of interest is built only on lies and deception 
and, because we know and have clearly recognised this, we know also 
that such a spider s web of lies and deception, however arduously it 
may have been spun, can be torn apart with one tug. 

Only one more question, the last, must occupy us, the question: 
What will foreign nations say to such a radical reform and especially 
to a refusal of further interest payments to foreign interest creditors? 

Yes, what will foreign nations say to that? This question is already 
in itself so extremely significant for our German distress and also for 
the cosmopolitan attitude of the largest circles. What in general are 
"foreign nations"? Are they the French, the English, the Americans? 
Are they the Swedes and Dutch and Norwegians? Are they the 
Russians or the Chinese? Or are they the Indians or the Fuegians 97 
or the Congolese negroes? Indeed, all these people belong to "foreign 
nations" in relation to us. Now, by far the greatest number of all 
these "foreigners" will not say anything at all, the smallest number of 
Chinese, also the smallest number of Russians and French will know 
in general what it is about. Finally there remain the governments of 
our war enemies and then naturally - as the ones really interested 
- the Jewish international bankers, who "will say something about 

97. [The inhabitants of Tierra del Fuego, the archipelago off the southern tip of South 


Gottfried Feder 

it". What the international finance will say to that is however very 
easy to answer. It will, with all the means standing at its disposal, 
characterise such a procedure as an unprecedented crime against 
cultured mankind, it will, through its own devoted press with all 
possible lies and distortions, raise the so-called civilised world against 
such an unprecedented breach of undertaken obligations, it will speak 
of the complete collapse of Europe, and it will attempt to incite France 
as the especially suited bearer of European civilisation to an open war 
against Germany. All that the foreign nations, that is, the Jewish high 
finance, will say against such an assassination attempt against the total 
power of the big Jewry. 

One could therefore spare oneself both the question in itself and 
the answer. For, it is clear as daylight that that power against which the 
war of liberation is directed will not subject itself without a fight, since 
it is not a matter here of Germans, to whom the foreign interests and 
rights are mostly more sacred than the rights of the Germans, but of 
men whose most outstanding characteristic is a brutal will to power. 

In all such final historical questions it is absolutely idle to make 
speculative observations on what the enemy will now do, for that the 
latter will not allow a liberation or revolt immediately is obvious. Quite 
different is the consideration of what means of power the opponent 
has at his disposal and to know what strengths one oneself disposes 
of. If, further, one knows precisely what one must oneself do and will 
do, then one must observe how the enemy will parry the attack and 
only then can one adopt the counter-measures. No military plan can 
determine the campaign beyond the first attack, but it can indeed give 
the general guidelines for an energetic course of action. So also here. 

In our case the opponents are hard to catch because it is a matter 
of an impersonal and supranational power. The campaign plan will 
therefore have to consider first which powers and interests do not 
come into consideration as opponents. This is important for not using 
powers unnecessarily in a direction from which no danger threatens. 

Behind the question, "What will the foreign countries say to that?" 
hides mostly the anxiety that we will in such a case receive no credit 
or food or other raw materials from abroad. Now what is the situation 


The German State 

As a national economy we can in the long run pay for our imports 
always only through our exports, that is, exchange goods for goods, 
but not with paper money and not with "credits". All this works for 
some time, so long as the foreign countries give actual credit, that is, 
so long as the different foreign suppliers have faith that the German 
importers will pay the concerned wares with full-value money. But 
that is possible only if the importers have collected foreign money 
as exporters of German goods. The fear that we will not receive 
any cotton or fats, copper or fodder, on account of the refusal of 
international interest payments combines questions together that 
basically do not have anything to do with one another. Even the all- 
Jewish big bank power cannot in the long run prevent the surpluses 
in the raw material-producing countries from reaching the German 
factories and workplaces in some way, and likewise will the German 
finished goods too find their way out into the sales markets of the 
world. This mutual exchange of goods between the different national 
economies indeed takes place according to the compelling laws of 
supply and demand. Of course, under compulsion, and temporarily, 
restrictions and stoppages can occur here as we experienced it in the 
war, and then again in the Ruhr region. 98 But these are all forceful 
measures that damage the foreign countries in a similar way. 

We can thus suppose with certainty that wholesale trade will 
succeed in covering the absolutely necessary import need. There will 
always be neutral countries through which these imports can reach 

Moreover, a national economy which is conscious once again 
of its national duties and which thereby would become again more 
efficient in the case of export articles can much rather count on the 
fact that it will regain the old trust. The temporary intermediary credits 
in import and export are matters of the trade houses and are based on 

98. [When, in late 1922, the Germans were found to be seriously defaulting in their payment of 
timber and coal as war reparations to the Allies, the French and Belgians, under the direction of 
the French Prime Minister Raymond Poincare, occupied the Ruhr industrial region in January 
1923. The German reaction to this occupation was mostly one of passive resistance, which won 
the sympathy of the world and led to a "softening" of the terms of the reparations in the Dawes 
Pact of April 1924 (see above p. 94), which also called for a withdrawal of Allied occupation 
troops from the Ruhr.] 


Gottfried Feder 

their personal credit. 

Now this question has another aspect, that is the fear of political 
compulsory measures on account of the suspension of the national 
interest payment to the war bonds and other interest-bearing bonds 
of the Reich or the federal states. Even this is extremely unlikely 
since it is a question here of the interest demands of individual private 
creditors of German government bonds, for whose sake hardly any 
political action can be taken. In fact also it has not yet occurred in the 
history of state bankruptcies that a military intervention followed when 
a state suspended its interest payment. The contrary opinion that, in 
this case, the French would immediately effect reprisals is in no way 
to be accepted on logical grounds for, otherwise, the enemies would 
at that time have had to intervene through military action against the 
decline of the German mark. The currency decline finally deprived the 
foreign creditors of German bonds of everything. Now our measures 
do not at all foresee the annulment of these internal German state 
debts, but only the cancellation of interest and the transformation of 
the bonds into bank assets. The cash payment can, on the other hand, 
be immediately offered to the foreign creditors. 

How is it possible that in such a case, that is, when Mr. X. Ilinois 
or Chicago receives the information from his banker that the German 
government is paying back the war bonds in cash and that this amount 
has been credited to his account, he would be very angry and set his 
government in motion against Germany? 

A serious resistance is to be expected from no side if a nationalist 
German government declared the cancellation of interest from all 
interest-bearing bonds with a simultaneous transformation of these 
bonds into interest-free assets in state banks or postal cheque accounts. 
For us it is important that, through our measures, the community is not 
harmed. - the fact that resistance will be undertaken from the capitalistic 
side cannot constrain the liberating deed. One will see precisely in the 
case of this measure that a separation of souls will take place here and 
that the the closed phalanx of those who will feel in this government 
measure a release and liberation of work from an enormous pressure 
will very soon include all workers. Only the bank and stock-exchange 
circle and those in the circle of small pensioners trapped in their own 


The German State 

advantages will continue to stand as their opponents. 

One who works has no special interest in the fact that he receives 
from his temporary assets interest from the banks, much less does 
he have an interest in paying very high interests for credits; with 
his money as a working capital he wants to work and earn. For this 
reason all businessmen, factory owners and tradesmen will be very 
little interested in the maintenance of the interest capitalistic system. 
- This becomes clear as daylight to everybody who bears in mind that 
government interests - as we have shown most clearly - are only 
extracted through direct or indirect taxes from the work income of the 
productive workers. 

One who has this knowledge clearly in mind cannot be swayed at 
any moment, for it is indeed just a fundamental principle: that the state 
can only give what it must once again take away from its citizens in 
some form. 

The interests for the interest payment of the state must in all 
circumstances be drawn from the productive workers. No worker is 
excluded from this principle, least of all the manual labourer who 
has no interest-bearing bonds at his disposal. This situation hits him 
hardest, for the direct and especially the indirect taxes also affect him 
most severely. Now, that precisely the worker is called on for the tax 
through the direct income tax in the form of income deduction before 
all other circles has already made the worker clairvoyant regarding 
these matters; the same is true also of all wage- and salary-earners. 
To be sure, these circles are much less conscious of the much more 
radical indirect taxes - although they feel them mostly in inflation, as 
was described in the chapter on "Inflation". Indirect tax is the most 
unsocial tax. It burdens work in favour of pure loan capital. Nobody 
can withdraw from it, and therefore it oppresses the one who has the 
least income most severely. On the other hand, the indirect taxes - 
the coal-, salt-, match-, sugar-, beer- and drink taxes, the personal 
transport taxes, etc. - do not disturb in the least the owner of large 
capital wealth. 

One therefore from the circle of workers who is an opponent of 
such a liberating deed can be that only through lack of knowledge and 
understanding of these connections. 


Gottfried Feder 

The last and hardest thing that we should still deal with in this 
chapter is the question of the removal of the international interest 
obligations - in other words, the refusal of further interest payments 
for the war debts. 

This question is most closely bound with the German historical 
question, indeed it is actually the German question in general, for it 
says: Does the German nation want freedom or slavery? 

We know that, in such final questions, only the determined will can 
determine and achieve victory - the reply to this question therefore 
goes far beyond the range of financial political observations. But it 
is essential that a nation that must strive for its freedom know that 
its slavery is in the very first place a financial political one, that here 
politics and economics are most closely related. But precisely this is the 
new thing about the present situation that it is ruled by financial power 
political viewpoints and that the military power political viewpoints 
come only in second place. 

We can indeed speak of the Mammonistic age as of a new epoch. 
The god Mammon has ascended the throne of this world. Emperor 
and king bow before him. The parliaments and governments are his 
submissive servants. He has been able to yoke large movements - like 
the striving of the wage-earners for their improvement. International 
capital has likewise made the presses of the world serviceable to its 
goals - as it has also made itself the adm inistrator of the cultural wealth 
and the adulterator of every national indigenous art and literature. 

As the most outstanding bearers of this Mammonistic infestation 
and rule of the world we have recognised the Jews and so the circle of 
our knowledge is closed once again with the question of all questions 
- the Jewish question. 

The solution of the interest problem is the solution of the Jewish 
question. The solution of the interest problem in the sense of our 
explanations is the breaking of the Jewish world-rule, because it 
smashes the power of world Jewry - its financial power. 

But the solution of the interest problem is, moreover, in a 
constructive sense, at the same time also the solution of the social 

A refusal of every interest and duty payments to the war debts 


The German State 

would place international finance, or France, before the question of its 
takeover of the the entire financial administration of all of Germany. 
If all the taxes of the Reich are removed that now serve the interest 
payment to the enemy, this would mean first of all internally a 
redemption from the crazy tax oppression, a great social political deed 
of the greatest scope, and the enemy would have to try to develop its 
own financial administration in Germany. 

But if the German people saw the French or Jewish tax collector 
sitting in every tax- and pension office, and if the best cows were taken 
from the stalls of the farmers by these foreign oppressors - then the 
anger and indignation would perhaps become soon so strong that one 
night would sweep the foreign spectre away with a bloody broom and 
free Germany. 

Whether, in general, a military power would take on such an 
enterprise in the service of the financial power is therefore still very 

The prospects of our will to liberation are in no way so unfavourable 
as they may have seemed at first - on the contrary. The very first 
time that Germany unanimously refused the handing over of its "war 
heroes", with this "no" the spectre was finished. 

Now international finance will certainly seek other methods, 
especially the method of the boycott and the entire strangulation of 
the international market. That it will not succeed in the latter may 
likewise be certain, and also the boycott of German goods would 
direct Germany, at first just in its economic activity, and for a time 
also exclusively, to its internal market. It would therefore be here also 
only the task of a skilled domestic policy - specially through generous 
promotion in the field of housing construction - to overcome the 
critical times and to use them for the welfare of the people, until the 
new paths to the world are determined. 

This opening up of new paths to the world will occur through 
the breaking of the Jewish domination even among other nations, for 
the way of the individual nations too to a healthy national economy 
can only be through their being cured of their domestic poisoning by 
the Jewish-Mammonistic poison. Then the natural paths of a healthy 
international trade and economic commerce between the nations will 


open up by themselves - and mankind, freed of the Jewish oppression, 
will experience an age of unprecedented prosperity - and, above all, 
Germany - the heart of the world.